- Savers swindled out of £5million in the first six months of this year alone
- Total lost to pension-related fraud is £43million since April 2014
- Crackdown includes extra checks on pension scheme sponsors
- Pension schemes given more leeway to halt transfers to suspicious providers
Alex Hawkes For The Mail On Sunday
Pension salesmen will be banned from cold calling potential customers as part of a Government crackdown aimed at stamping out the fraud that has seen thousands of savers duped out of tens of millions of pounds of their life savings.
The ban on unsolicited calls, texts and emails is being announced today after a long-running campaign against abuses, highlighted by The Mail on Sunday’s Personal Finance pages.
The fraud has seen thousands of people tricked out of their pension savings or ill advised on how to invest funds.
Crackdown: Thousands of people have been tricked out of their pension savings or ill advised on how to invest funds
The Department for Work and Pensions today also revealed that pensions savers were swindled out of £5million in the first six months of this year alone. Since April 2014 the total lost by savers to pension-related fraud is £43million.
Former Pensions Minister Baroness Altmann said: ‘The Government has bowed to overwhelming pressure from politicians of all parties, consumer groups and the industry to urgently introduce a ban on pension cold calling.’
The crackdown will also make it harder to set up fraudulent schemes, as pension scheme sponsors will need to provide regular accounts.
Alert: How The Mail on Sunday highlighted pension and other scams in December last year
Also existing occupational schemes that receive a request from a member to transfer out will have to check the cash is sent to a genuine provider fully registered with financial watchdogs.
Since reforms in April 2015 made it easier for over-55s to access their retirement funds, fraudsters have found new ways to swindle pension savers.
WHERE TO GO FOR HELP
Action Fraud: If you suspect a fraud, report it to the UK’s national fraud and internet crime reporting centre, Action Fraud on 0300 1232040.
The Pensions Advisory Service: Offers free and impartial guidance on pensions and will tell you how to spot a scammer.
Pension Wise: Over-55s who want to take advantage of new pension freedoms can make a face-to-face or phone appointment with the Government’s free guidance service on 0800 802 1345, or call 44 20 3733 3495 if you live outside the UK.
Pension Tracing Service: Some scammers will offer to help you find lost pensions but the Government will offer free help. Take care if you do an online search for the Pension Tracing Service as many companies using similar names will pop up in the results. These will also offer to look for your pension, but try to charge or flog you other services, and could be fraudulent.
Minister for Pensions and Financial Inclusion Guy Opperman said: ‘Eight people in the UK are targeted by cold calls every second in relation to a private pension. That’s 250 million a year. Victims lose nearly £15,000 on average.’
The crackdown has been hailed by the industry, but some urged Ministers to set a timetable soon for it to take effect. Tom Selby, a senior analyst at savings platform AJ Bell, said: ‘There remains no set date for implementation.
‘We urge policymakers to fast-track this vital protection through Parliament.’
Nathan Long, head of corporate pension research at financial services firm Hargreaves Lansdown, said: ‘What the Government has proposed isn’t going to stop fraudsters cold calling. These people are already working illegally. What it does is cement in people’s minds that any unsolicited call you receive is illegal.’
Gareth Shaw at consumer body Which? said: ‘As fraudsters look for new ways to target even the savviest people, the regulator must ensure this is enforced.’
Lesley Titcomb, head of the Pensions Regulator, said: ‘We welcome the tough new measures and are working closely with Government, enforcement agencies and key financial service bodies to bring scammers to justice.’
PHRASES PENSION FRAUDSTERS USE THAT SHOULD SET ALARMS BELLS RINGING
The offer won’t last long
You’re entitled to a free government review
You’ll make a better return by investing in storage units/forests/overseas property
There’s a guaranteed 7 per cent return
We’ll send a courier over with your documents
Can you sign quickly – I’m parked on a double yellow line
There’s a legal loophole
You’re a sophisticated investor
Your pension company might try to talk you out of it – they just want to keep your money