It's been a long time coming but June should see the pensions cold calling ban take effect having reached the statute books as part of the Financial Guidance and Claims Act. It's been promised since November 2016 when it was touted amid rising concerns about the rise in the number of pension scams thanks to the introduction of pension freedoms. However, there are already fears that the proposed legislation could fall short.
Recently, the chair of the Work and Pensions Select Committee Frank Field voiced concerns that there could be potential loopholes for fraudsters who contact people face-to-face. He said:
"It is easy to imagine how a skilled marketer could use the opportunity of a face-to-face conversation to gain the trust of a 'prospect' and persuade them into a particular course of action. When the 'cold call' is in person, it is not simply a matter of putting the phone down or deleting a spam email."
Research carried out by the Money Advice Service suggests that there are up to eight scam calls every second, with the Citizens Advice Bureau calculating that nearly 11 million people have received some form of unsolicited contact about their pension since the advent of pension freedoms.
The former pensions minister, Baroness Ros Altmann has welcomed the new legislation, but thinks it could go further.
"It enshrines in primary legislation the guidance that is already part of the FCA Conduct of Business rules, but it leaves the option of ‘consent’ on the table, so that people may be considered to have asked for a cold call," she says.
"Even if those who do the cold-calling can be traced, there is often little that can be done to enforce punishment. Fines are often unpaid as the firm puts itself into administration, or penalties on overseas companies cannot be enforced."
The situation should become clearer once the full details of the legislation has been revealed. At the very least, even if the new legislation does fall short in some areas, it should at the very least place a spanner in the works of many of the scammers' business models.