An investigation has been launched by the police and The Pensions Regulator (TPR) into a number of pension schemes suspected of being linked to cold-calling. The investigation commenced due to TPR's concern that some pension holders are being telephoned without their consent and being persuaded to transfer their funds into poorly-run schemes with false promises of high returns and upfront cash incentives.
It's an issue that has been of concern since the introduction of pension freedoms in 2015, with people now being given much more choice as to what they can do with their pension, rather than be restricted to choosing an annuity.
Mike Birch, TPR's Director of Case Management, said: "Cold-calling pension holders aren't illegal yet, but no reputable business does it. We would urge anyone to contact Action Fraud if they are phoned and offered the chance to transfer their pension. Our message is simple – a cold-call about your pension is an attempt to steal your savings."
As part of the investigation, The Pensions Regulator has appointed an independent trustee to run the Alderley Wealth Management pension scheme following concerns of the management of more than £3 million of funds. It is alleged that despite some members requesting their funds be invested into low-risk UK based investments, some funds were placed in high-risk and illiquid funds overseas. It's alleged that payments may have been made to introducers, some of whom may have used cold calling to target pension holders.
Cold calling ban
Calls for a ban on cold calling have been being made by a wide range of pension experts. Speaking recently at Parliament's Work and Pensions Select Committee, former pensions minister Baroness Ros Altmann said:
"Cold-calling for mortgages was banned a few years ago, we urgently need to do the same for all unsolicited approaches on pensions (and possibly other financial products too) before more people lose their hard-earned savings. There is an ideal opportunity to legislate, as the Financial Guidance and Claims Bill is going through Parliament at the moment. Thanks to the hard work of the House of Lords, a cross-party group of peers forced the Government to add important amendments to the Bill, including a requirement to ban cold-calling."
There was some concern that the due to pressure on parliamentary time from issues including the Brexit negotiations that the proposed cold calling ban would be put on the backburner. However, this month has seen the Department for Work and Pensions and the Treasury say that it would look to make its own legislation that will introduce a ban "as quickly as possible" after the Work and Pensions Committee criticised the delays.
"The government will continue to work swiftly to implement a cold calling ban by tabling a workable amendment to the Financial Guidance and claims bill, and then making regulations to introduce the ban," the update said.