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Financial services should be banned from cold calling

17 May 2013

Pension pots at risk of cold calling scammers

Financial services like claims management companies, pension unlocking services and credit brokers should be banned from cold calling according to Citizens Advice.
New research from Citizens Advice found 35% of complaints about these financial services were from a cold call¹. People paid up front fees for loans that never materialised, had their bank details passed onto other companies and firms failed to abide by cancellation rules.

Today (Friday 17 May) an Ofcom study revealed that 82% of adults received a nuisance call during a four week period. It found that where the person was able to identify what the call was about, 22% were for PPI claims, and 10% of recorded sales calls were about pension rebates.

Citizens Advice found a direct correlation between shoddy financial services, cold calling and lead generation – where people’s details are passed on without their apparent permission.

The research is a detailed analysis of a sample of complaints (1,845) about financial services to the Citizens Advice consumer service between January and February 2013 which found:

  • 35% of cases had evidence of cold calling, out of the blue texts, letters and spam emails
  • 97% of cases about pension unlocking services and 56% of PPI claims management stemmed from cold calls
  • 13% said their personal and/or bank details had been passed from company to company
  • half involved an upfront fee
  • 30% were scams many of which were from cold calls, had upfront fees or persistently tried to persuade people to part with their cash.

The Citizens Advice consumer service dealt with over 30,000 complaints about cold calling for a range of products and services between April 2012 and March 2013². Half related to professional and financial services including PPI and offers of loans.

Citizens Advice Chief Executive Gillian Guy said:

“People are being hounded in their homes by unscrupulous financial firms. Without a ban on cold calling for financial services people are at risk of losing some of their pension to scams or paying upfront fees for services that don’t deliver. A ban on cold calling will make it clear that if you are still contacted out of the blue then it is a scam or a service not to be trusted.”

Last year 9 out of 10 people surveyed by Citizens Advice were pestered by calls, emails and spam texts from claims management companies within 12 months - 72% were about making a claim for PPI.

May is Scams Awareness Month. Citizens Advice and Trading Standards have been warning people to be on the look out for scams and how to report them.

Top tips to give cold callers the cold shoulder

Ignore spam text messages.

Put the phone down on marketing telephone calls.

Be careful how you share your personal contact details.

Forward spam texts to your mobile provider for them to take action: 7726 for Everything Everywhere or O2, 37726 for 3, 87726 for Vodafone.

Report any scams to Action Fraud on 0300 123 2040.

Make a claim for mis-sold PPI yourself by contacting you bank directly.

Get advice about claims management companies from the Citizens Advice consumer service on 08454 040506 (or Welsh speaking 08454 04 05 06), online at www.adviceguide.org.uk or from your local CAB.

Complain to the Information Commissions Office about spam text on 030 3123 1113.

Citizens Advice analysed 1,845 calls made to the consumer service between 1 January to 28 February 2013 about the following financial services.

Breakdown of types of services analysedNumber of cases
Bill of sale lender2
Claims management and similar services561
Credit broker710
Debt collection scam27
Debt collection to small business4
Debt management129
Insurance/warranty97
Mortgage broker3
Not known16
Other11
Payday lender281
Prepaid card2
Timeshare2
Grand total1845


Almost a third of cases were about claims management companies or similar.  The following table provides a breakdown of these services.

Type of claims management or other similar legal servicesNumber of cases
Bank and credit card charges21
Business rates rebate3
Council tax rebanding20
Endowment mis selling3
Fraud on bank account1
Mortgage mis-selling14
Not known23
Pension unlocking67
Personal injury18
PPI379
Other5
Unenforceable consumer credit agreements7
Utilities mis-selling2
Grand total561

Notes to editors

1. Citizens Advice analysed 1,845 calls made to the consumer service between 1 January to 28 February 2013 about the following financial services.

Breakdown of types of services analysedNumber of cases
Bill of sale lender2
Claims management and similar services561
Credit broker710
Debt collection scam27
Debt collection to small business4
Debt management129
Insurance/warranty97
Mortgage broker3
Not known16
Other11
Payday lender281
Prepaid card2
Timeshare2
Grand total1845


Almost a third of cases were about claims management companies or similar.  The following table provides a breakdown of these services.

Type of claims management or other similar legal servicesNumber of cases
Bank and credit card charges21
Business rates rebate3
Council tax rebanding20
Endowment mis selling3
Fraud on bank account1
Mortgage mis-selling14
Not known23
Pension unlocking67
Personal injury18
PPI379
Other5
Unenforceable consumer credit agreements7
Utilities mis-selling2
Grand total561

2. The Citizens Advice consumer service handled over 30,031 complaints about unsolicited calls between  April 2012 and March 2013.  Half, 15,051, were about professional or financial services.

3. Citizens Advice report 'The Claims Pests' revealed that 9 in 10 people surveyed by Citizens Advice in August 2012 (300 respondents) had been contacted out of the blue by a claims management company within the last 12 months.

4. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk

5. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see www.adviceguide.org.uk

6. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.9 million problems from April 2011 to March 2012. For full 2011/2012 service statistics see our quarterly publication Advice trends

7. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable (nfpSynergy’s Brand Attributes survey, May 2010).

8. Most Citizens Advice service staff are trained volunteers, working at around 3,500 service outlets across England and Wales.