The Government has confirmed measures to protect savers from pension scams, including a ban on pensions cold-calling, which will now include emails and text messages.
Other measures announced on Sunday include tightening HM Revenue & Customs rules to stop scammers opening fraudulent pension schemes, and tougher actions to prevent the transfer of money from occupational pension schemes into fraudulent ones.
The Government has said only active companies that produce regular, up-to-date accounts can register pension schemes. A statement explains that limiting transfers of pension pots from one occupational scheme to another will mean trustees have to check their receiving scheme is regulated by the FCA, has an active employment link with the individual, or is an authorised master trust.
According to AJ Bell there will be two exemptions from the proposed ban: calls where consumers have expressly requested information from a firm, and those where an existing client relationship exists.
AJ Bell senior analyst Tom Selby is concerned there is no date set for implementing the ban and wants to see it progressed through parliament as a matter of urgency.
He says: “This must be seen as the start as the fightback against scammers rather than the end, however. Policymakers should monitor the effectiveness of these measures closely and consider further changes if savers continue to be pick-pocketed by fraudsters.”
The ban will be enforced by the Information Commissioner’s Office.
Chancellor Philip Hammond confirmed in the 2016 Autumn Statement that the government would seek to ban pensions cold-calling. The announcement followed the pensions sector getting behind a petition to ban pension cold calling that was started by Red Circle Financial Planning director Darren Cooke in September last year.
The Government says almost £5m was obtained by pension scammers in the first five months of 2017. It is estimated that £43m has also been unlawfully obtained by scammers since April 2014, with those targeted having lost an average of nearly £15,000.
Pensions and financial inclusion minister Guy Opperman says: “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 Pensions Regulator chief executive Lesley Titcomb says: “We welcome the tough new measures announced today which will strike a significant blow to pension scammers who devastate people’s lives by duping them out of their life savings.”