Author Lauren Howells
In a move designed to try and tackle the estimated £43 million that has been unlawfully obtained by pension scammers since 2014, the government has announced that it is going to ban private pensions cold calling, including emails and text messages.
“Tough new measures”
In response to a consultation regarding pension scams, launched in December 2016, the government has said that its “tough new measures” will also include the tightening of HMRC rules, in an attempt to stop scammers opening fraudulent pension schemes, as well as tougher actions to help prevent money being transferred from occupational pension schemes into fraudulent ones.
The government has said that new figures show that nearly £5 million was obtained by pension scammers in the first five months of 2017.
97% of pension fraud cases come from cold calling
Cold calling is by far the most common method used by scammers to initiate pension fraud, with 97% of pension fraud cases seen by Citizens Advice in 2013, reportedly originating from cold calling.
It is so far unclear when the ban on private pensions cold calling will come into effect. The government has revealed that, during the rest of this year, it intends to work on the “final and complex details” of the cold calling ban, with the aim of bringing forward legislation to deliver the ban when Parliamentary time allows.
The government has said that it is also tackling scammers by making sure that only companies which are active and produce regular, up-to-date accounts, are able to register pension schemes. This is separate from the cold calling ban and should form part of a Finance Bill, scheduled for later in 2017.
Minister for Pensions and Financial Inclusion, Guy Opperman, said: “Today’s 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 life 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.”
Those targeted lose an average of almost £15,000
With each person who has been targeted by pension scammers reportedly losing an average of just under £15,000, it is clear that something needs to be done to tackle this problem.
Economic Secretary to the Treasury, Stephen Barclay, said: “It’s utterly unacceptable that people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket.
“Pensions are often the most valuable asset a person has upon reaching retirement – and that’s why we are determined to crackdown on scammers and protect our hard-working savers.”