Pensions cold call ban delay ‘snuck out’ amid Trump and Brexit distractions
Economic Secretary to the Treasury, John Glen, yesterday confirmed he had laid before parliament a ministerial statement to set out the government’s progress on pensions cold calling. This comes after the government missed the June deadline for the policy, pushing it back to Autumn.
He said: “Pensions cold calling is an important and complex issue. Pensions scams can have devastating consequences and cold calling is the most common method used to initiate pensions scams, so the government has taken the time to ensure the ban works for consumers.
“The government will imminently publish a consultation seeking views on a set of draft regulations to ban pensions cold calling. Once we have considered all responses to the consultation, in the Autumn we intend to lay regulations under the affirmative procedure and subject to parliamentary approval bring the regulations into force as soon as possible thereafter.”
Former pensions minister, Steve Webb, currently director of policy at Royal London, said the Treasury chose the date of the publication of the Brexit white paper and the visit of the US president to sneak out this statement. As such, it’s unlikely the ban would come into force until 2019 at the earliest.
He said: “The Treasury has chosen a good day to bury bad news. While everyone’s eyes were focused on the Brexit white paper and the visit of the US president, it decided to admit officially that the cold-calling ban is going to be further delayed.
“Nobody doubts that if this issue was a real priority for the government a ban would already be in place right now. The repeated delays mean yet more innocent people will be scammed out of their life savings by crooks who ring them up out of the blue with persuasive offers and pressure sales techniques. It’s understandable the government is embarrassed by this delay, but it now needs to pull out all the stops to get this legislation in force.”
Official figures from the City of London Police revealed that savers have been fleeced out of more than £51m in the first three months of the 2018/19 tax year. This is a significant increase from investment fraud of £30m reported in the first quarter of 2017/18.
In total, £167m in investment fraud losses were reported in 2017/18, with the average fraud victim aged 57.
Tom Selby, senior analyst at AJ Bell, said the figures show the problem is getting worse, rather than better and while ministers delay the implementation of the ban, millions of hard-working savers are at greater risk of being targeted by financial fraudsters.
He said: “The cynical targeting of often vulnerable older people by scammers has surged following the introduction of the pension freedoms in April 2015, with savers now free to withdraw their entire retirement pot from age 55.
“Sadly this represents an irresistible opportunity for fraudsters, who often lure people to invest in bogus schemes with the promise of outlandish guaranteed returns. These returns usually don’t materialise and sometimes the investment itself won’t even exist.”
An HM Treasury spokesperson said: “We’re committed to introducing a ban on pensions cold calling as quickly as possible. Following debates in parliament, and having considered evidence from the industry, we will shortly be publishing a short consultation on the draft legislation to ensure it is as effective as possible. We intend to lay the required regulations before Parliament this Autumn.”