Ban on pension cold calling announced
As part of its measures to protect pension savers, the Department for Work and Pensions (DWP) said it will look to tighten HM Revenue & Customs (HMRC) rules to stop scammers opening fraudulent pension schemes.
It will also take tougher action to help prevent the transfer of money from occupational pension schemes into fraudulent ones. By limiting transfers of pension pots from one occupational scheme to another, trustees must check the receiving scheme is regulated by the Financial Conduct Authority, has an active employment link with the individual, or is an authorised master trust.
Further, it will also ensure that only active companies, which produce regular, up-to-date accounts, can register pension schemes.
The move comes as recent figures show almost £5m was obtained by pension scammers in the first five months of 2017. It is estimated that £43m has been stolen by scammers since April 2014, with those targeted having lost an average of £15,000 each as scammers entice savers with false promises of low-risk, high-return investment opportunities.
The cold calling ban will be enforced by the Information Commissioner’s Office (ICO).
Minister for Pensions and Financial Inclusion, Guy Opperman, said: “The figures highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again. That is why we are introducing tough new measures for those who scam.
“If people have saved for a private pension, we want to protect them. This is the biggest lifesaving 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.
Steve Webb, director of policy at Royal London, said the announcement is welcome, but it is vital the ban is implemented as a matter of urgency as savers are being ripped off every day.
“We cannot afford to wait months or even years before it is illegal to phone someone up out of the blue in this way, as a cold call is often the first step to a scam.
“The tightening up of who can register a pension scheme is long overdue. The deregulation of pension scheme registration allowed all sorts of questionable people to register pension schemes and describe them as officially ‘approved’.
“Royal London also welcomes the tightening of the rules on pension transfers. Where we have had concerns about a transfer in the past we have found the existing law did not always give us the support we needed to act in the member’s interest. These changes are a step in the right direction.”