Introducing legislation to ban cold calls from pension scammers has been on the Government’s radar for some time. But now, following a lengthy delay, MPs are calling for action to be taken sooner, rather than later, pushing for the Financial Guidance and Claims Bill to be approved.
What has happened so far?
The Government’s plan to ban cold calling was confirmed by Philip Hammond, during his 2016 Autumn Budget. However, progress in implementing new legislation was slowed down by the 2017 General Election, before seeming to halt altogether.
In August 2017, the Government released an outline of their plans to implement a pensions cold calling ban. However, MPs feel that the progress toward a ban is too slow. In the meantime, millions of calls are being made and thousands are being lost to scammers.
Why is it so important?
Statistics from Action Fraud show that:
- Victims of pension fraud lost almost £5 million between January and May 2017
- An estimated £45 million has been taken by pension scammers over just three years
- During that time, each victim lost an average of £15,000
How the ban will work
The ban on cold calling would prohibit phone calls from businesses, to people they have had no prior dealings with. It is hoped that a ban, and the ensuing publicity, will send a clear message to the people being targeted, that they can simply hang up the phone if they do not recognise the person calling.
The Financial Guidance and Claims Bill refers to:
“(a) suspected inappropriate, misleading or harassing approaches with regard to debt advice, debt management, pension access and claims management services, and (b) suspected dishonest, unfair or unprofessional conduct by those supplying financial services relating to the areas of activity of the single financial guidance body.”
The Bill also broaches the subject of cold calling. It includes a clause instructing the single financial regulatory body to carry out annual assessments of the effects of cold calling on consumer protection. It goes on to instruct the regulatory body to advise the Secretary of State to implement a ban, if that assessment shows a negative impact on consumers.
Currently, this Bill is making its way through the approval process, but it may not reach the final stage – royal ascent – until 2019. Which gives fraudsters more than 12 months to continue to target vulnerable people.
Protecting your pension against fraud
Knowledge is everything if you are being targeted by a pension scam. Knowing who to trust can be difficult, but there are a few things you can do to prepare yourself and outsmart the bad guys:
Know their methods: Cold calling isn’t just unwanted phone calls, fraudsters may try to contact you via post, email or text message. Just because a letter or email looks official does not mean that it is.
Verify their identity: Companies legitimately offering you financial advice, are unlikely to contact you out of the blue, but you can keep yourself safe by asking for company details. All financial advisers are regulated by the Financial Conduct Authority (FCA). Never take financial advice from anyone who isn’t authorised and regulated. You can find out if the company contacting you is authorised here.
Be smart: Many pension scams start by telling you that they can help you to access your pension fund before the age of 55. They can’t. Whilst it might be tempting, remind yourself of the golden rule; if it sounds too good to be true, it usually is.
Talk to people: Community is a great defence against crime. By starting to talk about how pension fraud is carried out, you can help each other and share information which may save you, or your loved ones, large amounts of money.
Report fraud attempts: Report any suspected scams to Action Fraud via phone or using their online fraud reporting system. By reporting criminals, you lessen their chances of tricking someone else.
Always seek unbiased, trusted and independent advice, never accept an unsolicited offer. To discuss your concerns, contact us today.