“And we will consult on how best to ban pensions cold calling and a wider range of pension scams.”
In a summary of the budget statement, the Treasury included a little more information, under the headline, “Building an economy that works for all”:
9. Cracking down on pensions scams
A consultation before Christmas will look at ways to tackle pensions scams, including banning businesses from cold calling someone about their pension. This includes scammers targeting people who inadvertently ‘opt-in’ to receiving third party communications.
Before the Budget speech, the Telegraph reported that,
Philip Hammond, the Chancellor, will use his Autumn Statement to introduce a ban enforced by fines of up to £500,000 for companies that break the rules.
Several other media outlets covered the story, including the BBC, The Sun, FTAdvisor, New Model Advisor, the Guardian, Money Marketing, Sky News, and the Daily Mail announced the ban as a “Victory for Mail”. Oh, and REDD-Monitor.
Hammond made no mention of any fines in his speech.
A consultation is a start
While chancellor Hammond did not announce a ban on cold calls or fines for companies cold calling, a consultation is perhaps better than nothing. Meaningful action from the government against boiler rooms fraudsters is long overdue.
On 15 May 2008, there was a long discussion in parliament about boiler room scams. Nigel Evans, a Conservative MP for the Ribble Valley had this to say:
Boiler room fraud is a big crime, yet not many people know about it. The police have called it the biggest fraud threat to households. It is even bigger than credit card fraud. The estimated loss last year was more than £500 million. One estimate puts the figure close to £1 billion. The fact is that nobody really knows what the top-level figure is, because, as I said earlier, not everybody involved knows that they are a victim.
You can read the discussion here (from the excellent website theyworkforyou.com).
Evans pointed out that, “usually the victims are cold-called — they receive calls that they have not initiated”.
Evans first heard about boiler room scams when he was contacted by BBC Radio 4’s “You and Yours” programme for a comment. Reporter Shari Vahl had investigated boiler room fraud for the previous two years. Evans said, “I pay tribute to her determination and doggedness and to “You and Yours” for raising this issue.”
Shari Vahl is still investigating scams. In December 2015, a You and Yours programme titled “Lies, Fraud and Forgery”, reported on Shari Vahl’s investigation into Store First. (REDD-Monitor has mentioned Store First in passing a few times in the past.)
Towards the end of the May 2008 debate, Vera Baird Solicitor General, Law Officers’ Department, responded to Evans’ concerns about boiler room scams:
We are now determined and very committed to delivering an integrated response to fraud such as the plague of boiler room fraud that preys on the vulnerable, but also to fraud across the board.
Much talk, little action
There have been other mentions of boiler rooms since 2008 in Parliament, but little serious action to stamp them out.
Much of the debate appears to be focussed on nuisance calls these days. In 2013, an all party parliamentary group on nuisance calls put out a report, which stated,
People are fed up receiving calls and texts trying to sell solar panels; to claim compensation for payment protection policies; to see whether you have had an accident; asking you to buy financial services; or simply to complete a survey – to see what they can try to sell you at a later stage. The situation needs to change.
In December 2015, then-Pensions Minister Ros Altmann asked a question in the House of Lords:
To ask Her Majesty’s Government, in the light of the risk of pension fraud and scams, what are their reasons for not banning cold calling about pensions.
Here’s the response she received from Lord Ashton of Hyde (Thomas Henry Ashton) of the Department for Culture, Media and Sport:
We are determined to tackle the scourge of nuisance calls especially those of a fraudulent nature. Our efforts are focused on taking action against companies that are deliberating break the rules, rather than penalising legitimate businesses who comply with the law.
My Department is in conversations with Her Majesty’s Treasury and the Department for Work and Pensions on how best we tackle scams as a result of pensions cold calls.
Let’s hope that the UK government is finally serious about taking some meaningful action to address the serious problem of boiler room scams.