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Philip Hammond’s Autumn budget statement did not ban cold calls. But the government will hold a consultation before Christmas

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2016-11-10-161426_1045x1035_scrotYesterday (23 November 2016), the UK chancellor gave his Autumn budget statement. Last week, there were several media reports that the chancellor was going to ban cold calls about pensions.

But Chancellor Philip Hammond didn’t mention the word “ban”. In his speech, which lasted just over 50 minutes, he devoted all of seven seconds to cold calling and pension scams. This is what he said,

“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 watch 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”, that 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.
 

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  1. Not good enough Mr Hammond, 4 out of 10….. must try harder.
    My parents have lost all of their savings this year because they are from an era where a mans word was his bond.
    Action Fraud are as much use as a toothless dog. I cannot believe that it is possible to call a company who are committing fraud…. I called one yesterday.
    The Police / Action Fraud need to target the people supplying the “suckers lists”, these people know who are committing the fraudulent acts.

  2. Hi all,

    According to this article a consultation ‘before christmas’ will take place.

    Were you Chris, or anyone else who reads this blog consulted?

    Cheers,

    Ian

  3. @Ian Zhang – In a written answer dated 20 December 2016, Simon Kirby, the Economic Secretary to the Treasury, states that:

    On 5 December the Government launched a consultation on a package of measures aimed at tackling different areas of pensions scams. One of the measures is a ban on cold calling in relation to pensions.

    A cold calling ban would cut off a key source of pension scams whilst also sending a clear message to consumers that they should hang up if they are cold called about their pension. The consultation will gather views on the exact scope of the ban and whether it should be extended to include electronic communications as well. The consultation closes on 13 February 2017 and next steps will be announced at Budget 2017.

    I wasn’t consulted.

  4. I would argue this is the UK’s main site for all investment scam related news. Along with Tony Hethringon, I don’t see anyone tackling this issue with such persistence and professionalism

    If you weren’t consulted, who was?

    Where could we submit our opinions too?