From today, households receiving cold calls about pensions should just hang up the phone.
After two years in the works, the government has today implemented a ban on any cold calling related to pensions.
This means in effect any phone call that you receive from a person or company that you do not know, where they ask about your pension, is not a legitimate call.
The Treasury says firms that breach the rules will face fines of up to £500,000.
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Scammers make as many as eight calls per second, according to the Money Advice Service, an astonishing figure – 250 million every year.
The average stolen by successful pension scammers was £91,000, per victim according to figures from financial watchdog the Financial Conduct Authority (FCA).
John Glen MP, economic secretary to the Treasury, says: “Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives. We know that cold-calling is the pension scammers’ main tactic, which is why we’ve made them illegal.
“If you receive an unwanted call from an unknown caller about your pension, get as much information you can and report it to the Information Commissioner’s Office.”
Lesley Titcomb, chief executive of The Pensions Regulator, adds: “The cold-calling ban sends a very clear message - if anyone calls you about your pension, it’s an attempt to steal your savings.
“The ban draws a line in the sand for scammers. Cross it and you should expect to be prosecuted.”
However, many scam phone calls originate from abroad, making it difficult for authorities to track and capture those responsible.
There are also exceptions to the ban. If the caller is authorised by the FCA, or is a trustee or manager of an occupational or personal pension scheme, or if the call recipient has an existing relationship with the pension provider.
How to avoid the scammers
The message is clear from the ban, if the person on the other end of the line wants to discuss your pension – just hang up.
However, it may be the case that the scammer has information about where your pension pot is held, or perhaps the company you work for, making it seems as if it is a legitimate call. The FCA exemptions make for an easy lie for a scammer to give over the phone to convince you they’re ‘legitimate’.
In these circumstances, politely hang up the phone and look up the number for your pension provider’s firm and call back instead. If your provider genuinely wants to speak to you, there will be a note on your file to say why.
Scammers can be silver-tongued so don’t let them rush you with information or decisions. Often a good indicator that they are trying to scam you is by offering a “free pension review”. Again, don’t engage with them, just hang up.
How to get proper help with your pensions
Ray Black, chartered financial planner and director of Money Minder comments: "Now the long-awaited cold call ban is in place, we need to ensure that people are regularly reminded about how important it is to be on top of their retirement planning.”
Pension holders should speak to the free and impartial advice services provided by the government. This includes The Pensions Advisory Service (TPAS) and Pension Wise.
Both services provide free and impartial help with a range of topics that stem from the complexities of looking after your pensions. Pension Wise is specifically targeted at over 50s in need of help with their pensions.
Mr Black adds: “I'm hopeful that combined with the pension scam information packs that were introduced a few years ago, the cold call ban will help to keep potential pension scam victims of the future a lot safer.”
For more complex planning matters, people should look to get regulated financial advice. Moneywise partners with Vouchedfor, to help find top impartial advice. Find out more at https://www.moneywise.co.uk/find-an-ifa
Mr Glen says: I’d also urge all savers to seek independent advice if you’re thinking about making an important financial decision.”