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Monday, 29 October 2018 00:00
Budget 2018: Pensions cold call ban set for this autumn
After a wait of nearly two years, Chancellor Philip Hammond has finally confirmed a pensions cold calling ban is set to ahead this autumn.
A draft statutory instrument has been published following the Budget and is set to be laid before Parliament this autumn.
Although a date has not been disclosed for implementation once the regulations are approved by Parliament they should become law within 21 days.
A ban could be in place by Christmas with a maximum fine of £500,000. The Information Commissioner's Office (ICO) will be the enforcing body.
A wider ban on text and email cold contacts has been ruled out for the time being by the Treasury because other regulations already cover these areas.
However the Treasury says that the cold calling ban will be part of a "suite" of preventative measures designed to tackle pension fraud.
The new regulations will be officially called the Privacy and Electronic Communications (Amendment) (No.2) Regulations 2018 and come after a long wait and repeated lobbying by the financial services sector for a ban on pensions cold calling.
Cold calls to consumers have been blamed for some of the worst examples of pension mis-selling as ruthless individuals have targeted some of the most vulnerable, often persuading them to transfer their pensions to much riskier investments.
The statuory instrument will make pensions cold calling illegal.
In its report on consultation on the ban the Treasury says: "Pension scams can have devastating consequences, such as the loss of an entire pension fund. On top of this, the chances of recovering these savings are very low, leaving most victims without the means to fund their retirement.
"Cold calling is the most common method used to initiate pension fraud. The serious consumer detriment caused by pensions scams means that the government has chosen to intervene directly to implement a pensions cold calling ban.
"The government first consulted on the policy through the Pensions Scams consultation launched in December 2016, and outlined its approach in the response published in August 2017. In July 2018 the government sought comments on draft regulations to implement the ban through a further consultation."
The ban is still by no means certain as it will require Parliamentary approval of the draft instrument but today's publication means the ban has moved a significant step closer.
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