The Work and Pensions Committee, the influential House of Commons committee has called on the government to bring forward plans to stop the use of cold-calling by scammers who target people's pension pots. In its report, they call on the government to fast-track the legislation to ensure that more people are not targeted and have their pension pots taken.
Whilst pension scams have always taken place, the introduction of pension freedoms in 2015 saw them increase rapidly. Pension freedoms allow individuals much greater flexibility over what they do with their pension pot which whilst largely welcomed by the public and financial advisors, also allowed unscrupulous financial advisors and scammers to con the unwary and vulnerable out of their money.
Frank Field, Labour MP who chairs the committee, said: "Everyday that passes without a ban, people are being avoidably conned out of their life savings. There is no need to over complicate this; our proposal would see an enforceable ban in place by summer, closing at least one door on rafts of scammers at a stroke."
Pensions, he said, due their value make rich pickings for scammers looking to get their hands on people's cash.
"The strongest weapon in the armoury against this is good advice and guidance – people just aren't taking it. Making guidance the default option, combined with the ban on cold-calling, would be a simple but big step forward in consumer protection in the era of pension freedoms. The government should use the bill [the financial guidance and claims bill] that has just arrived in the Commons to legislate to protect pensions now."
Currently, the House of Commons has already amended the Bill to empower the forthcoming Single Financial Guidance Body to recommend a ban, however, that would still mean the ban would take two years to come into force.
Yvonne Braun, the policy director of the Association of British Insurers agreed with the Work and Committee's call, highlighting the fact that mortgages are already protected by a cold calling ban.
"With mortgages already protected by a cold-calling ban, it is high time pensions were given the same level of protection. Further measures to prevent fraudsters switching to spam emails and texts will also be important."