Financial Guidance and Claims Bill [HL]

Lord Faulks Excerpts

Report: 1st sitting: House of Lords
Tuesday 24th October 2017 Lords Chamber

[Viscount Brookeborough (CB)]

I was on the Financial Exclusion Committee. When we talk about targeting the vulnerable, it is not a matter of someone taking all the numbers or addresses out of a book; it is done scientifically. These people look at the vulnerable and consider when they will be vulnerable and how they will get at them.

The amendment includes digital. We were given evidence that single, older and vulnerable people were especially targeted digitally in the middle of the night. So if they are not sleeping well and switch on their computer, what comes up? We should not think that this is just blanket coverage and some of these people picked it up. The high numbers we have been given are targeted numbers and therefore the response rate, sadly, is very high. These are the people we are trying to protect.

We would like to reduce the number of cold calls that people receive purely by chance and do not listen to, but far too high a proportion of these cold calls are listened to because they are targeted on vulnerable individuals in our society.

[Lord Faulks (Con)]

My Lords, I join this debate relatively late and I hope the House will forgive my intervention. I speak from the position of having been a Minister in the Ministry of Justice. One of my tasks was to try to do something about cold calling and the frustrations and distress it can cause. The noble Lord, Lord Sharkey, was right to identify whiplash injuries and, more recently, the problem with holiday sickness. It is a scandal and one is acutely conscious that the vulnerable should be protected from this offensive practice.

My question to the Minister about the amendment is this: is this really the right body for this particular function? I note that the drafting by the noble Lord, Lord Sharkey, the skill of which I admire, tacitly acknowledges this by giving the body a consumer protection function which seems, on the face of it, rather beyond its original remit; albeit it includes a consumer protection function, I accept. Then there are the various stages which are included in Amendment 2 and the riders in Amendment 7. This is quite a cumbersome method of achieving what I think all the House will agree is a satisfactory aim, which is to prevent cold calling.

I understand that the Government are committed to doing something about cold calling. Various attempts have been made before and I acknowledge that they have not been as successful as they should have been, but this does not seem to be the obvious fit for such an initiative. Can the Minister satisfy me and the House that the Government intend to bring forward appropriate legislation if they believe, as I suspect they may, that this is not the right vehicle for that process?

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, perhaps I can be helpful on a couple of the points just raised by the noble Viscount, Lord Trenchard. These amendments ban solicitations in real time, as he will have noticed. That obviously excludes letters. It means that you can send information through the post; no one would wish to prohibit proper kinds of marketing. It is the nuisance and intrusion and the element of pressure that comes from that real-time activity that is the pernicious side of solicitation. That, essentially, is cold calling and is exactly what this is intended to deal with.

The noble Viscount suggested that financial education and capability are the way to go; indeed, many in the Government feel that that is the route to deal with cold calling, so that people know to hang up. However, the noble Viscount, Lord Brookeborough, was very clear in illustrating that, while we all get cold calls, we are merely the tip of an iceberg. For those who pursue this, the real focus is on people who are absolutely the most vulnerable. Being realistic, financial education and capability, even on the most extraordinary scale, would be very unlikely to provide adequate protection to that group of people who are now constantly being abused.

On the point made by the noble Lord, Lord Faulks, if this body is not associated with consumer protection, quite frankly I wonder what this body is for. That is the underlying premise that sits behind both the predecessor groups that are now being put into the single financial guidance and advice body. It is essential to bring this on to the face of the Bill in a very clear way, as it is the underlying motivation and characterisation of this body, and certainly it is a responsibility.

The noble Lord, Lord Faulks, also suggested that the Government do intend to move in this area. We have been hearing that for an incredibly long period of time and, with constant pressure, perhaps one day the Government will move. The problem is that we need protection now. We need protection in the near term because, as my noble friend Lord Sharkey, the noble Earl, Lord Kinnoull, and others have illustrated, this has grown in such scale and momentum that there are daily victims. Every day that we wait there are more victims. Since it is completely unnecessary to wait because the language in this Bill serves the purpose, then in a sense it would be extraordinary to say we will sit back and wait 18 months or two years or whatever else, allowing people to be abused. We can bring a stop to it now in a very simple and straightforward way.

If I understand the Government correctly, they are willing to look at certain targeted areas in which to stop cold calling but not to provide a stop to cold calling in each area where there is clear detriment, which is what the amendment allows through use of this new single body to identify and communicate that detriment. These organisations are so slick and quick they can move from one topic to another very rapidly—you close one door and another door gets opened. For example, we stopped cold calling on mortgages. That is an excellent example that tells you we can do it. It is straightforward. The dimensions are understood. The complexities are well-considered and we have plenty of track record to look back at to make sure that it is done well. We have all of that in place. However when cold calling on mortgages was banned, it shifted on to the next issue—currently, it is pensions, claims management and holiday sickness. Everybody can be absolutely sure there will be something new, provided loopholes are left, by simply attacking one issue here and one issue there. That is the beauty of this particular amendment: it gives us the power to deal with this whole industry, the same people and the same players.

I shall make one last remark and then sit down. I want particularly to congratulate the four noble Lords whose names are on this amendment, all of whom have been working so hard in this area. Three of them are here today, able to speak for themselves, but one of them cannot. The noble Baroness, Lady Altmann, as we know, has been a real mover and shaker on these issues, not just over cold calling for pensions—pensions are her area of real expertise and we have heard her on that—but we have also heard her in this House speaking around the much broader issue as well, which is why she has put her name to the amendment. She had a speaking engagement at lunchtime in the Midlands which she felt she could not cancel. She has not eaten lunch but run to the train station. She is on the train which pulls in to the station at 4.30 and had been greatly hoping there would be a Statement today that would delay this long enough that she could be here to join in with this particular section of the debate. I am sure she will speak in later parts of this Report.

The noble Baroness should not be left out when we recognise that the movers and shakers on this are from every side of the House. This is not a partisan or party-political set of amendments. This is a set of amendments by Members of this House who recognise their responsibility to protect those who are most vulnerable now, before more damage is done, and I hope the Government will see it that way.

[Lord Faulks]

Before the noble Baroness sits down, will she clarify one thing? She was critical of my suggestion that the insertion of the consumer protection function is in some way an attempt to expand the scope of the SFGB. She said, quite correctly, that it is part of the SFGB’s function to protect consumers, but surely the purpose of this amendment is to expand the scope of its activity beyond that which is already in the Bill so that it can deal with matters that are beyond what is apparently in other parts of the Bill.

[Baroness Kramer]

I thought that we could only speak once on Report, but I hope that the House will excuse me if I get to my feet again. Fundamentally, I disagree with the noble Lord. Consumer objectives are merely bringing to the face the underlying discussion and the ethos which sits entirely behind this body and every one of its instructions. If the noble Lord reads all the roles and responsibilities and the debates about those roles and responsibilities, he will understand that this meshes perfectly with these activities. It strengthens its hand in an obvious way, rather than leaving it in a slightly awkward, ambiguous situation.