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Government bans pension cold calls to fight fraud

The government has confirmed plans to ban pensions cold-calling, including emails and text messages.

Government bans pension cold calls to fight fraud

The government has confirmed plans to ban pensions cold-calling, including emails and text messages, but no date has yet been set for implementation.

The ban, enforced by the Information Commissioner's Office, represents a tightening of HM Revenue & Customs rules to stop scammers opening fraudulent pension schemes.

It also imposes tougher actions to help prevent the transfer of money from occupational pension schemes into fraudulent ones.

The government is also aiming to ensure that only active companies producing regular up-to-date accounts can register pension schemes. 

The announcement comes as new figures show almost £5 million was obtained by pension scammers in the first five months of 2017. It is estimated that £43 million has also been unlawfully obtained by scammers since April 2014.

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.

'If people have saved for a private pension, we want to protect them. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.'

Tom Selby, senior analyst at AJ Bell, said the measures would put a 'severe dent in the business models used by these fraudsters'.

He added: 'However, it is concerning there remains no set date for implementation and we urge policymakers to fast-track these vital protections through parliament as a matter of urgency.

'It’s also important to note that this will not stop cold-calling or pension scams. Fraudsters will seek to exploit any loopholes in the rules, and many of the outfits involved will simply move their call centres abroad to avoid the ban.

'But the message this intervention sends to savers is hugely valuable and should go some way to reducing the number of people who get conned out of their life savings.'

The move comes after a long delay following a petition from Derbyshire financial adviser Darren Cooke, launched in October 2016. 

The government has come under fire from the profession after repeated delays in the introduction of legislation.

Hargreaves Lansdown senior pension analyst Nathan Long said: 'Clamping down on calls, texts and e-mails won’t stop the scammers, but it sends a loud and clear message to be on your guard if you are contacted out of the blue. The golden rule with pension planning is if something appears too good to be true, it almost certainly is.

'Making pension schemes harder to set up and ensuring transfers only proceed to appropriately regulated schemes will all help to blunt the damage that scammers can inflict moving forward, but pension savers must remain vigilant.'

2 comments so far. Why not have your say?

archie scott

Aug 21, 2017 at 12:11

All for fighting to prevent fraud but what about giving pension firms a kick up the arse when they deliberately drag out perfectly legitimate pension transfers. If the Govt reckons you should be able to switch banks / utilities within days why does the pensions industry need 2 -3 months to arrange pension transfers AFTER they have all the necessary paperwork

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Aug 21, 2017 at 18:33

It will be like RDR. The government will spend a year consulting the industry, then give them 2 years to comply, and then another year.

After a further 2 years experience with the new regime, it will find the industry is charging too much and give them 2 years to lower their fees, etc ad infinitum. We are not called rip off Britain for nothing.

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