Industry figures have backed the government’s newly-announced ban on called calling, but have said this is just the beginning of the battle against pension scams.
This comes days after HM Treasury confirmed it was prohibiting cold callers from selling pension products in a bid to stem the surge in scammers conning people out of their savings.
Adrian Walker, pensions expert at Old Mutual Wealth, said anything that raises awareness of the risk of pension scams is “valuable”, but claimed legislation should also include “carve-outs” to help authorised firms understand what constitutes legitimate lead generation.
He pointed to research from YouGov which found 12 per cent of the over-50s have been contacted about a ‘free review’, ‘unlocking’ or ‘liberation’ of their pension, with most being contacted by phone.
Mr Walker said the government should use all the tools available to them to deter fraudsters, which could include the threat of prison sentences.
“To get the public to take notice the threat of cold calls should be widely publicise warnings through advertising campaigns, on all government websites and on state pension forecasts.”
Tom Selby, senior analyst at AJ Bell, said pension scams had already caused huge damage to thousands of savers’ retirement dreams.
“The combination of measures set to be announced by chancellor Philip Hammond should act as a real deterrent to scammers and sends a clear signal the Government is at last taking this issue seriously.”
He said AJ Bell has seen large numbers of savers attempting to join suspicious small self-administered schemes who have no connection to the employer linked to the scheme, adding: “Tackling such abuses would protect savers and help clean up the Ssas market.”
“However, this welcome move by the Chancellor must be seen this as the beginning of the process of tackling pension scams, not the end.
“Banning cold calling will cut off one of the heads of this many-headed beast, but the government, regulators and industry must remain vigilant and consider what further measures might be necessary to deter fraudsters.”
Cold-callers could attract a fine of up to £500,000 for violating the ban, which includes cold-calling people who have inadvertently opted in to receiving third party communications.
Gillian Guy, chief executive of Citizens Advice, said the organisation’s research found that as many as 10.9 million people received unsolicited calls, emails and texts about their pensions over the past year.
“Promises of high returns are used to trick people into fake investments leaving them with a reduced or even empty pension pot.”
She said this ban on pension cold calls is the “right move” to protect people.
“Giving the power to fine scammers also means enforcement bodies will be able to put a stop to any scammers that still target people’s savings.”
Darren Philp, director of policy and market engagement at auto-enrolment pension scheme The People’s Pension, described pension scams as a “disgrace”.
