A new law has come into force which makes it illegal for companies to cold call about pensions. The ban on unwanted, unsolicited phone calls to people about their pensions follows an industry campaign to make the practice illegal. Companies breaking the new law could face fines of up to £500,000.
This is an important change in the law because pension fraud has such a devastating, lasting impact on its victims, leaving them financially vulnerable in retirement. The government has taken action to ban pension cold calls because these are one of the most common methods used by scammers to gather information about pensions and then defraud their victims.
According to research carried out by the Money Advice Service, there could be as many as 250 million scam calls about pensions every year in the UK. This is equivalent to 8 scam calls every second. Pension scammers stole on average £91,000 from each victim in 2018, according to the Financial Conduct Authority. 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’d also urge all savers to seek independent advice if you’re thinking about making an important financial decision.”
Guy Opperman, Minister for Pensions and Financial Inclusion, said:
“Pension scams are despicable crimes, fleecing people of the retirement they’ve earned by doing the right thing, working hard and saving for the future. Banning pensions cold-calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law.”
Commenting on the introduction of the pension cold calling ban, Alistair McQueen, Head of Savings & Retirement at Aviva said:
“From today the message is clear; if you receive unsolicited contact about your pension,hang-up the phone, delete the email or dump the text. It is now illegal to make such contact, and any perpetrator could be subject to a fine of up to £500,000.
“This is good news, but there is no room for complacency. Fraudsters continue to circle the pensions market – the biggest single source of private wealth in the UK.
“We may spend 40 years saving, so we should spend more than 40 minutes considering our options at retirement. We should not feel rushed into action.”
Anyone on the receiving end of a cold call about their pensions should try to obtain as much information as they can about the caller, including their company name and phone number. This information should then be reported to the Information Commissioner on 0303 123 1113 or via their website at www.ico.org.uk.
If you think you have been the victim of a pension scam, you should report it to Action Fraud by calling 0300 123 2040 or via their website at www.actionfraud.police.uk.
It’s also important to take immediate action if you think you’ve been targeted by a pension scammer. Call your existing pension provider immediately to tell them you are worried as they may be able to stop any transfer of monies.
The old adage that ‘if something looks too good to be true it probably is’ should be kept in mind when it comes to all financial matters. The promise of better than typical investment returns or access to pension money before the age of 55 are big red flags that suggest something dodgy is happening. Always check that any financial adviser you work with is authorised and regulated by the Financial Conduct Authority. Do this by checking the Financial Services Register atwww.fca.org.uk/firms/financial-services-register and also asking the adviser for a current copy of their Statement of Professional Standing.
Only by working with an authorised and regulated adviser do you get recourse to the Financial Ombudsman Service and Financial Services Compensation Scheme, should things go wrong.