The UK government has once again postponed its proposed ban on cold calling. The government is holding another consultation and in Autumn 2018 will present legislation for discussion in both Houses of Parliament.
Darren Cooke, a director of Red Circle Financial Planning, describes the cold calling ban as, “stuck in the Whitehall quagmire”.
In September 2016, Cooke launched a parliamentary petition in the UK calling for a ban on all cold-calling related to pensions or investments.
Two months later, Philip Hammond, the UK Chancellor, announced in his Autumn budget statement that the government would “consult on how best to ban pensions cold calling and a wider range of pension scams.”
On 5 December 2016, the government launched a consultation on pension scams. The deadline for comments was 13 February 2017.
But in April 2017, the government’s proposal for the ban on cold calling was dropped because of the general election.
In July 2017, the government held another consultation, and announced a cold calling ban on 20 August 2017. But a spokesperson at the Department of Work and Pensions told FT Adviser that no date had been set for the matter to be discussed in Parliament.
The ban is mentioned in the Financial Guidance and Claims Act, which became law in May 2018. But instead of legislation banning cold calling, the Act includes an amendment (Clause 21) giving the Secretary of State two options:
- make regulations on banning cold calling to be discussed by both Houses of Parliament before the end of June, or
- make a statement “explaining why regulations have not been made and setting a timetable for making the regulations” before the end of July.
In a statement to Parliament on 12 July 2018, John Glen, the Economic Secretary to the Treasury went for the second option:
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.
On 20 July 2018, the government launched another consultation. In an email announcing the launch, Josephine Suherman-Baily of the Treasury explained that, “The consultation launched today is a short, technical consultation intended to seek final views on the draft regulations to ensure they meet our policy objectives.”
The consultation will end on 17 August 2018. REDD-Monitor’s response remains as it was for the previous consultation: implement the ban on cold calling as quickly as possible. Make the ban as strong as possible. Loopholes in the ban will only provide an open door for the scammers.
A ban on cold calling will not stop scams. But it will at least send out a clear message that such calls are illegal.
Former pensions minister Baroness Ros Altmann told FT Advisor that the latest delay is “really disappointing”. She said,
“The need for a ban is widely recognised. The sooner cold-calling for pensions is outlawed, the sooner people will be better protected against being scammed and losing their life savings.
“So many people have already suffered from such pension frauds – and they almost all start with a cold-call.
“Having worked so hard in the Lords stages of the Bill to get a proper ban on pensions cold-calling, only to then see the measures watered down significantly, it is really disappointing that even these weaker protections will not be put in place on time.
“I urge the Government to ensure these regulations are ready and enacted very quickly.”
This is disgraceful, but predictable, as hidden lobbies apply pressure to delay such bans that effect this lucrative business.
This parallels the similarly weak government “Take five” campaign that feebly advises to “take care” before giving confidential information to cold callers…instead of advising to tell the caller to get stuffed…