Organisations making unwanted, unsolicited phone calls to individuals regarding their pensions could face enforcement action, including fines of up to £500,000, under legislation that comes into force today (9 January 2019).
Research conducted by the Money Advice Service in October 2015 found that there might be as many as 250 million pension scam calls per year. According to the Financial Conduct Authority, pension scammers stole on average £91,000 per victim in 2018.
Guy Opperman, minister for pensions and financial inclusion, said: “Pension scams are despicable crimes, fleecing people of the retirement they’ve earned by doing the right thing, working hard and saving for the future. Banning pensions cold calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law.”
The ban prohibits cold calling in relation to pensions, except where the caller is authorised by the Financial Conduct Authority (FCA) or is the trustee or manager of an occupational or personal pension scheme, and where the recipient consents to calls and has an existing relationship with the caller.
Margaret Snowdon OBE, chair of the Pension Scams Industry Group said: “We welcome these regulations to ban cold calls in relation to occupational and personal pension schemes. Of course, a ban on cold calling will not deter all scammers, but anything that makes it more difficult is a good thing.
“A significant public awareness campaign will now be vital to ensure that the man in the street is aware that cold calls about their pensions are now illegal.”
Kate Smith, head of pensions at financial services organisation Aegon, added: “The introduction of legislation to make pension cold calling illegal is welcome news and sends a clear message to scammers that unsolicited calls to people about their pensions won’t be tolerated. While the ban will go some way in preventing scam activity and protecting individuals and their savings, there is still considerable work to be done to educate the public so people are aware that cold calling is illegal.”