Great news: the Information Commissioner, hitherto a fairly scant presence in our national life, will from April 6th, take stern action when a complaint about cold calling is received. Previously, damage had to be proven. No longer. Action will include punitive fines. It can’t come soon enough. But there is a flaw here – acting after complaints gave come in and been investigated will be too late for other people who fall victim to future waves of cold calling and who are fleeced before anyone else can bring them to the attention of the Information Commissioner’s office . These firms should first have to obtain a licence and be bound by rules before they start calling. Let me explain why.
I’m quite used to cold callers by now, as most of us are, having been approached about everything from PPI compensation (who hasn’t?), voluntary bankruptcy, “a recent road traffic accident”, and, a bit of a collector’s item this, compo for loss of hearing through working in heavy industry (the government had just passed a law for this. I’ve never worked in a foundry or the like, by the way).
All follow a pattern I am sure is familiar; an official-sounding but bogus “company” name; a fairly clumsy attempt to pass themselves off as being connected with a proper business you will have heard of, such as your car insurer; the fishing for personal details; the transparently false assurance that they just want to check details; the persistence of the cold caller, and the final offer to send some information with no obligation. All the cold callers are, painfully, obviously driven by their pitiful bonuses to try and mug as many punters as possible – “leads” for their own clients.
All fairly routine. Recently, though, I received a call that was much more sinister, if predictable enough in its own way.
The call went like this. Cheerfully, I was offered a “free assessment” of my pension provision – having fished around to find out if I have in fact got any private pensions (if you’re only going to get a state pension obviously they don’t want to help you out). If you foolishly agree to allow strangers from a firm you’ve never heard of ferreting around in one of your most private and valuable assets, with a view to stealing some of it, they will then courier round a document that confirms the details you’ve given and, crucially, allows them to persuade you personally to sign a letter of authorisation, so they can ferret away apparently with our consent. They tell you this is because so much of their stuff gets lost in the Royal mail; that is rubbish. In reality (after a little persistent questioning on my part) it becomes apparent that they do it this way so that the courier can pressure you into signing on the dotted line there and then – no time for you to consider what you're doing, let alone consult friends, family or proper financial advisers, or indeed your pension provider.
What happens then? I dread to imagine. I would think you will indeed be given an “assessment” recommending you move your pension pot to one or more of their clients, in which case they will get a fat, undisclosed fee, and you may well end up with much worse performance and/or higher charges than you had before. They might even fool you into swapping a final salary pension for some duff annuity. Chilling.
That’s the warning. Yet I wonder why are these cold callers, as they freely admit, not registered, regulated or otherwise officially sanctioned? Are they regulated if they pretend to be or act as financial advisers? Who will be liable when it all goes wrong? What price will be paid by the state when the defrauded pensioners have to fall back on benefits, having lost their security in old age to legally sanctioned theft?
All questions for the current pensions minister Steve Webb, sure - but also for his successors in five, ten, twenty years’ time when this fraud really starts to work its way through the system. It will happen. Older people have enough to contend with without this additional attack on their security. They don’t like putting the phone down, they are maybe not as sharp as they once were, and can quite easily be bullied by some “courier” on their doorstep with a pen and a complicated document in hand (no independent witness apparently required). The pickings for the vultures are substantial. I am much in favour of Mr Webb’s reforms, but I do worry about how they will turn out.
Now I am waiting for a call back with further details of the wonderful service the cold callers provide. This is to continue my tale; I have no intention of signing up though, and I do have a rather sinking feeling that not everyone will be as impervious to their bullying ways as I have, so far, been.
After various sorry episodes – Maxwell, Equitable Life, misselling of persona pensions, hidden charges, “zombie” funds and routine poor performance – the UK has an abysmal record in pensions, one reason why so many of us just put our faith in our homes and hope for the best. But if you think confidence in the pensions industry couldn’t sink any lower, just wait until those cold callers really start recruiting their “prospects”. Please don’t be one of them. Aviva, the Pru and all other responsible firms need to act on this before their entire business is tainted by this scandal. I await the next call from a pensions boiler room with great interest, and no little trepidation.
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