As the industry awaits the government response to its consultation on a pensions cold-calling ban, there are increased concerns over further delays to protecting the public from scammers.
A ban on cold calling formed part of the Department for Work and Pensions and HM Treasury's consultation on pension scams, which was launched in December 2016 and closed in February this year.
The government just needs to get their act together and get something done
Malcolm McLean, Barnett Waddingham
The industry is still awaiting the government’s response to the consultation, while members of the House of Lords recently criticised the absence of a cold-calling ban in the financial guidance and claims bill. Some feared that a further consultation might be launched before the ban becomes law.
Will there be further consultation?
A Treasury spokesperson said in a statement: “We’re determined to put an end to dodgy pension scams and have consulted on a number of measures to tackle the problem,” and “will shortly set out next steps on the cold calling ban”. The Treasury is aware it is a complex area that requires careful and detailed consultation with stakeholders during the course of the year.
But the pensions industry is becoming increasingly concerned and frustrated with the ongoing delay, particularly with the idea of further consultation on pension cold calling.
Another consultation would be “asking yet more questions about protecting the public, rather than just getting on with it”, said former pensions minister Baroness Ros Altmann in a statement on Friday.
Malcolm McLean, senior consultant at Barnett Waddingham, said: “I just cannot understand why the government have procrastinated [on banning pension cold-calling]”.
He suggested that various legislative complications might be getting in the way. “They’ve had long enough on this” and “the government is quite culpable to let this drag on… they just need to get their act together and get something done”, he added.
If a second consultation were to be launched, this would be “completely superfluous” because the government already knows what the views of the industry and the public are on this issue, McLean said.
Martin Tilley, director of technical services at Dentons Pensions, said he is against the idea of further consultation due to the further delay to tackling scams.
“Do we need more delays? If we’re having more delays, is it because we’re actually coming out with something that’s substantially fit for purpose? In which case… that’s fine,” Tilley said.
He added that the only acceptable reason for the continued delay would be that the government is in private discussions about cold-calling and other ways to prevent scamming.
Scammers have a head start
As the government drags its heels over a ban on pensions cold calling, scammers are being given more time to plan ahead and find other ways to target people, according to Tilley.
When setting out the proposed plans to ban cold calling, “what you’re doing is telling the scammers in advance”, noted Tilley. This would enable them to think about other options, such as setting up overseas cold-calling centres, where a UK ban would not apply, he explained.
Tilley said fraudsters may also “make hay while the sun shines” and “make the best of it now”, before a ban is implemented.
Have we finally got a handle on scams?
Phoenix Life's Danny Dowd says government must help the industry to stamp out pension scams and liberation fraud.
He added: “Having said that, bringing in any form of cold-calling ban has got to be a step in the right direction – if nothing else, it will be a headline-grabbing educational piece to the people who are being scammed.”
This would help raise general awareness about pension cold calls, so that even if people are targeted by overseas scammers they may have a greater understanding of what to look out for.
Ian McQuade, director at Muse Advisory, agreed: “If the ban were introduced – even if it only applies to calls from the UK – then that would allow some very clear messages to be communicated by schemes and the authorities”.
He explained that even though overseas calls and other fraudulent activities will not be covered by the cold-calling ban, if it were common practice to hang up on unsolicited calls about pensions, the risk of people succumbing to scams may be reduced.
On the topic of whether a second consultation would be beneficial, McQuade noted that “while implementing a cold calling ban is challenging, a further consultation will just delay any ban and could therefore lead to people losing out as a result of being mis-sold”.
