By Mark Fairlie.
From 9th January 2019, it will be illegal to make unsolicited calls or texts to people on any aspect of their current pension provision. Companies which do not obey the new law will be liable for fines of up to £500,000 as the Government seeks to deter scams, which, according to the Telegraph, cost each victim an average of £91,000.
The only exception to the rule is calls made by FCA-authorised advisors, calls made by managers or trustees of personal or occupational personal pension schemes, or where there is an existing business relationship with the caller.
Research from the Money Advice Service suggests that, prior to the introduction of the new rules, a quarter of a billion calls and texts were sent each year.
The campaign to make the practice unlawful was launched by Darren Cooke, a chartered financial planner at Red Circle Financial Planning. After watching a BBC Panorama program in 2016 on pension scams, he sought support and “quickly gained” it from former pensions ministers Baroness Ros Altmann and Sir Steve Webb.
Speaking to that publication, Mr Cooke said that
“I started the original petition and then expected to sit back and let it run its own course. I had no idea or intention that I would become so involved or become any sort of voice or figurehead for the campaign.”
While welcoming the change in the law which was brought about after extensive consultation, Alistair Wilson, Zurich’s head of platform strategy, as a “major step forward in the fight against pension fraud”, that more needs to be done for the ban to be effective in an interview with Professional Advisor.
The coming launch of a “pensions dashboard” would provide scammers with a brand new target and there is no way that the law will prevent calls coming in from overseas, according to Wilson. He believes that, for the incidences of fraud to significantly decline, there needs to be a “vigorous and ongoing awareness-raising campaign” to inform clients that any unsolicited approach from anywhere on their pension provision is likely to be a scam.
Speaking to the same publication, Tom Selby, senior analyst at AJ Bell, expresses the same concerns and believes that fraudsters will “look to circumvent the ban or simply ignore it altogether.”
The chief executive of the Pensions Regulator believes that the ban sends a “very clear message” and that “if anyone calls you about your pension, it’s an attempt to steal your savings.” (source: Sky News)
Anyone receiving a pensions scam call or text should make note of the telephone number that the fraudster is dialling from as well as trying to find out as much information about the company they represent as possible. Potential victims should not give any personal information away during the call.
Recipients of calls are then advised to either call 0303 123 1113 or file a report at the Information Commissioner’s Office using their online form.