Backed by Baroness Ros Altmann and Steve Webb, both former government Pensions Ministers, Michelle Cracknell of the government’s official pensions helpline, The Pensions Advisory Service (TPAS), has called for a ban on pension cold callers. This is in light of an increase in sophisticated fraudsters preying on vulnerable people and scamming them out of their pension pots.
More than 10 million pensioners are being targeted every year by fraudulent cold callers thanks to the advent of the government's pension freedoms which now gives savers the chance to do almost what they like with their pension pot. This has been seen as a 'green light' for fraudsters.
Talking to the Daily Telegraph, Michelle Cracknell, head of The Pensions Advisory Service said:
"If a ban was put into place it would be a further protection to customers. Not everybody is aware. Most people tend to have a positive outlook that it's OK [when someone cold calls]. Our advice is that you should be suspicious. The good financial advice companies don't need to cold call. Government services don't cold call. We all know how many calls we have received on PPI and you've had a car accident. That is coming to an end and pensions is incredibly vulnerable. People don't understand what they've got. We would like every customer to refuse to take cold calls on their pension funds."
"People are cold calling and if you don't have a level of knowledge about how your pension works you can very easily get suckered in. They target vulnerable people. A number of people are quite scared of saying no to people, particularly if they are sophisticated sales people."
The situation is made worse by the fact that the criminals involved are very clever and almost impossible to trace, channeling money through layer after layer of overseas companies, which makes it almost impossible for even the most experienced and talented pension investigators and forensic accountants.
Another factor that may help to influence a future government decision on the matter is the need to protect future generations of pension savers. Thanks to auto enrolment, we now have millions more people saving towards their retirement who are also potential victims for pension fraudsters.
The brutal truth of what happens when you become a victim of the fraudsters was spelled out by Michelle Cracknell:
"Our responses [to people who have lost money] are now quite blunt. We need to make customers aware that whilst they should report it, the reality is that even if the pensions ombudsman rules in your favour the chances of you getting your money are next to zero."