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Zurich warns of 'loopholes' in cold calling ban

London, February 17, 2017

Leading pension provider Zurich has raised concerns over potential loopholes in the Government’s crackdown on cold calling.

The insurer cautioned that fraudsters could side-step proposals to prevent pension firms contacting savers without warning.

Responding to HM Treasury’s consultation, the insurer said it backed the ban but called for it to be extended to secondary referrals and call backs.

Iain Mills, Zurich’s Director of Operational Taxes, said: “The Government is taking the right steps by clamping down on cold calling and we support the measures outlined in the consultation. However, we are concerned that scammers could exploit a number of loopholes in the ban, which might continue to leave savers exposed to unscrupulous callers.

“Under the current proposals, there is nothing to prevent cold callers contacting consumers about products outside the scope of the ban, before diverting the conversation towards pensions.

“For example, it would be legitimate to call potential victims about a will writing service, and enquire whether they would also be interested in receiving a call back about their pension. Cold callers could then pass on the person’s details to a potential scammer who could legitimately contact them.

“Closing off these angles would help us stay one step ahead of scammers and ensure there are fewer ambiguities fraudsters can exploit to target people’s life savings.”

For the cold calling ban to be effective, Zurich said that firms should be prevented from offering free pension reviews and pension tracing services, common tactics used by scammers to lure savers. 

It also said the ban should cover all electronic communications, such as emails and text messages.

Zurich is also pressing for the customer helpline that it is piloting with The Pensions Advisory Service (TPAS) to be rolled out across the industry.

Under the initiative, TPAS specialists offer impartial guidance to Zurich customers requesting to transfer into schemes deemed high risk.

“Consumers have a statutory right to transfer and currently there is very little providers can do to stop them if they want to proceed,” Mills said.

“We think an independent voice could reinforce the warnings providers already give to savers.  This would encourage people to think twice before pressing ahead with a transfer where there is a high risk of them losing some or all of their life savings.

“This, combined with measures proposed in the Government’s consultation, will help to stem the tide of fraud against pension savers.”

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