With the amount of money that many people have set aside for their retirement, pensions have always been targeted by scammers. Since the advent of pension freedoms, which has now given people much more choice as to what to do with their pension pot, unfortunately, pensions have become even more of a target for scammers intent on relieving people of their hard-earned retirement provision. According to figures from the government, almost £5 million was lost to fraudsters in the first five months of 2017 alone, with a total of £43 million being lost since April 2014. The average amount lost by people who have been targeted by pension scammers was £15,000. This has led to the government to announce a proposed new law to ban pension cold calling in a bid to halt the scammers.
The pensions minister, Guy Opperman, said:
"If people have saved for a private pension, we want to protect them. This is the biggest life's saving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned."
What Will The New Ban Cover?
The ban will cover all cold calls, emails and texts about pensions. The new law will be enforced by the Information Commissioner's Office (ICO) who will have the power to fine companies who flout the new rules up to £500,000. However, action will only be able to be taken against those companies flouting the rules within the UK.
When Will The Pension Cold Calling Ban Come Into Effect?
This is as yet unclear. Because of the Brexit vote, there is a huge amount of legislation that is needed to go through Parliament to enact legislation in the UK to replace EU laws. This could see it be put back to 2019, although this is just conjecture at the moment.
What Else Do I Need To Know?
There are however two crucial points to the proposed ban on pension cold calling that pension advisors and consultants should be aware of as these have not been made as clear as they might have been in the press. The points to consider are:
- Companies will still be able to contact people that have expressed an interest in their products and services.
- Companies will still be able to call and market to their existing customers.