Ban on pensions cold-calling comes into force
This week marks the introduction of the government’s ban on pensions cold calling, with unsolicited calls to individuals about their pension made illegal from 9 January and potential fines of up to £500,000 for those flouting the regulations
9 Jan 2019
Research by the Money Advice Service suggests that there could be as many as eight scam calls every second, the equivalent of 250m calls annually, while figures from the Financial Conduct Authority (FCA) indicate pension scammers stole on average £91,000 per victim last year.
John Glen, economic secretary to the Treasury, said: ‘Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives. We know that cold-calling is the pension scammers’ main tactic, which is why we’ve made them illegal.
‘If you receive an unwanted call from an unknown caller about your pension, get as much information you can and report it to the Information Commissioner’s Office. I would also urge all savers to seek independent advice if you’re thinking about making an important financial decision.’
The ban prohibits cold-calling in relation to pensions, except where the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and the recipient of the call consents to calls, or has an existing relationship with the caller.
Anyone receiving an unwanted pensions call is advised to report it to the Information Commissioner’s Office via their website or on 030 123 1113. Individuals who think they have lost money to fraud should report it to Action Fraud.
Ian Bell, RSM’s head of pensions, said: 'Cold calling is the most common method used to initiate pension fraud so it's a mystery why it's taken quite so long for the government to ban it.
'Nevertheless, today's ban is extremely welcome as it sends a very clear message that cold calling is not only unacceptable but also unlawful.
'The Pensions Regulator and the FCA will now need to keep up their efforts to build awareness among scheme members that unexpected pension offers whether made online, on social media or over the phone should be rejected outright.
'We also need to see effective enforcement action from the regulators and the police to deter others who may be tempted to target pensions scheme members' lifesavings.
'This ban will not solve the scourge of pensions fraud overnight. Indeed, risks will remain from overseas operators who will be outside the scope, but it is a step in the right direction. However, everyone in the pensions industry will need to be vigilant and respond to new threats which will undoubtedly emerge.'
Report by Pat Sweet