The government has this week set out a ‘notice of amendment’ to the existing Financial Claims and Guidance Bill, which sets out a ban on pensions cold calling to be implemented by June 2018.
It comes after repeated calls from both the pensions industry and the Work and Pensions Committee to hasten the implementation of a ban, which has been on the government’s agenda for more than 18 months.
The government’s amendment states: ‘This new clause inserts a new power for the secretary of state to make regulations (subject to the affirmative procedure) banning unsolicited direct marketing relating to pensions. If the power is not exercised by June, the secretary of state must explain to Parliament why not.’
In addition, the amendment gives provision for the government to monitor whether a cold calling ban related to financial products other than just pensions would be appropriate too.
Tom Selby, senior analyst at AJ Bell, comments: ‘After years of prevarication the government is finally taking decisive action in the war on pension scammers. The ban on cold-calling might not kill all forms of pension fraud stone dead, but it will certainly wound firms attempting to defraud savers of their hard-earned retirement pots. It also sends a clear message to people that if they receive a cold-call about their pension, they should simply hang up the phone.
‘However, the reality is scammers are becoming increasingly sophisticated and in the time it has taken policymakers to introduce this ban, tactics have evolved. We have always said a cold-calling ban should be viewed as the beginning of the onslaught on pension scammers, and we urge the Government and regulators to consider further interventions to protect savers.
‘Hundreds of millions of pounds has been lost by people using their pensions to invest in unregulated schemes that remain at the heart of many recent scandals. Introducing a permitted investments list for SIPPs so such investments are no longer allowed would be a huge step forward in tackling the scourge of pensions fraud.’
This article was orignally written by our sister publication Moneywise.
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