A FORMER pensions minister has warned savers are being “ripped off” after the Government set out plans to crack down on scams.
Sir Steve Webb demanded urgent action to protect savers as new figures showed £43m had been illegally siphoned off over the last three years.
Critics have claimed moves in recent years to give savers more options over their pension pots has created new opportunities for fraudsters.
Proposals put forward by ministers include a ban on all cold calling in relation to pensions and tougher rules on transferring money between pension schemes.
Sir Steve, pensions minister in the Conservative-Liberal Democrat coalition government and now policy director at Royal London, said: “Whilst this announcement is welcome, it is vital this ban is implemented as a matter of urgency.
“Savers are being ripped off every day, and the official figures greatly understate the amount that is being lost.
“We cannot afford to wait months or even years before it is illegal to phone someone up out of the blue in this way, as a cold call is often the first step to a scam.”
The Government said new figures show nearly £5 million was obtained by scammers targeting private pensions in the first five months of 2017.
Victims of pension scams lose nearly £15,000 on average, as fraudsters try to encourage savers to part with their money with false promises of low-risk, high-return investment opportunities.
The cold calling ban propoed by the Government will be enforced by the Information Commissioner’s Office.
There will be two exemptions from the proposed ban to ensure legitimate businesses are not affected – calls where consumers have expressly requested information from a firm and those where an existing client relationship exists.
Trustees will have to check a receiving scheme is regulared by the Financial Conduct Authority before money can be transferred from an occupational pension.
Ministers are also promising to tighten the rules to make it harder for scammers to open fraudulent pension schemes.
Pensions Minister 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 lifesaving 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.”
The cold-calling ban, which will also include unsolicited emails and texts, was welcomed by campaigners.
Citizens Advice research has previously found that as many as 10.9 million people received unsolicited calls, emails and texts about their pensions in 2016 alone.
Gillian Guy, chief executive of Citizens Advice, said: “Banning unsolicited calls – a move Citizens Advice has been calling for – will make it much easier for people to spot a pension scam, and should put fraudsters off making contact out of the blue in the first place.”