Pensions cold-callers face £500,000 fines under new rules to stop scams
Ban introduced to stop some of estimated 250 million unsolicited calls every year
“Callous crooks” making cold calls about pensions face fines of up to half a million pounds under new plans to protect savers from scams.
A long-awaited ban on pensions cold calling comes into force from Wednesday after a government consultation received evidence that as many as 250 million scam calls are being made each year.
Fraudsters stole an average of £91,000 from each of their victims last year according to the Financial Conduct Authority. Scams frequently start with unsolicited calls offering “free pension reviews", big returns, or using high-pressure tactics to sell complex investment structures.
First announced by Chancellor Philip Hammond in November 2016, the cold calling ban has been repeatedly pushed back. It was originally expected before the end of 2017 before being delayed to the summer of 2018 and then again to the autumn.
John Glen, the economic secretary to the treasury, said pension scammers were 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," he said.
Anyone who receives an unwanted call from an unknown caller about their pension is advised to gather as much information as possible and report it to the Information Commissioner's Office.
“The cold calling ban sends a very clear message,” said Lesley Titcomb, chief executive of the Pensions Regulator.
“If anyone calls you about your pension, it's an attempt to steal your savings.”
The ban does not apply to callers who are regulated by the Financial Conduct Authority (FCA) or to the trustee or manager of an occupational or personal pension scheme.
Calls from people or companies who have an existing relationship with the caller are also still allowed under the new rules.
“Banning pensions cold calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law,” said Guy Opperman, Minister for Pensions and Financial Inclusion.
Pension freedoms introduced in 2015 have been criticised by MPs for providing an opportunity for scammers to steal people's savings.
Under the changes, anyone over the age of 55 can take some or all of their pension as a lump sum, with the first 25 per cent paid tax-free.
The Work and Pensions Committee has said that the high financial value of some pension pots, combined with some savers’ low awareness of the risks involved in investing had created a scammer’s “perfect storm”.