HM Treasury and the DWP have launched a joint consultation at options for preventing pension scams, which have long been the bane of the pensions industry.
The consultation which runs until 13th February 2017, proposes a multi-pronged approach to tackle the threat of pension scams, including:
- An outright ban on ‘cold calling’ in respect of pensions, to be enshrined in primary legislation.
- Restricting the circumstances in which an individual will have a statutory right to transfer their pension benefits.
- Making it harder for fraudsters to set up small pension schemes likely to be used for pension scam purposes.
Cold-calling is the most common method used to instigate a pension scam. Indeed, I have received unsolicited calls from companies claiming that they have been “instructed by the Government to offer people a free pensions review”, or saying that there is a loophole in the pensions legislation that means people can access their pension funds from any age. I normally invite them for a meeting, they never want to meet once I explain who I am.
A blanket ban on pension cold-calls will provide a very clear message to the public – no legitimate organisation will ever cold-call you in respect of pensions. Any such call will be a scam.
Any UK based organisation that breaches this ban would be liable to sanctions imposed by the Information Commissioners Office, including a fine of up to £500,000.