Announced nearly two years ago by the government, the ban has only now come into place. The ban is introduced on nuisance calls about pensions.
The government has been criticised for taking so long to introduce it after their announcement. Although, restrictions on unsolicited texts and emails about pensions have already been put in place.
People still urged to be on their guard even with the ban.
The ban is to designed to stop cold calling.
Fraudsters trying to steal life savings are using cold calling. Or to persuade people to invest in high-risk schemes.
Unsolicited pension calls and messages made each year amount to some 10.9 million, according to Citizens Advice.
Now, any companies found flouting the rules faces a fine of up to £500,000. But experts suggest fraudsters may ignore the ban.
John Glen, economic secretary to the Treasury, said:
“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.”
How fraudsters operate.
Pension scams start with an unexpected call, text, social media approach or email. Next, callers offer free pension reviews. They are told of ways to make attractive returns on pension savings.
However, the money may be simply stolen or transferred into a high-risk scheme. For instance, a scheme which is more often completely inappropriate for retirement savings.
Moreover, offers of eye-catching returns or high-rolling investments, such as green energy schemes or in hotels that never materialise, Or instead, lead to losses.
Research by City regulator, The Financial Conduct Authority.
Certain types of cold calls, including those involving mortgages, are already banned.
Now, the new ban also prohibits cold-calling in relation to pensions.
There are exceptions, however. Callers authorised by the FCA. Or is the trustee or manager of an occupational or personal pension scheme. Where the recipient of the call consents to calls or has an existing relationship with the caller.
Lesley Titcomb, chief executive of the Pensions Regulator, said:
“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.”
Tom Selby, of pensions firm AJ Bell, said :
“Prohibiting cold-calling is only part of the solution and will by no means eradicate the threat of scam activity altogether. Pensions remain a juicy target for fraudsters and some will inevitably look to circumvent the ban or simply ignore it altogether.”
Consequently, he urged anyone who received a call out of the blue about pensions to simply hang up the phone.
Kay Ingram, director of public policy at financial adviser LEBC, along with others said:
“The cold calling ban of itself would not deter determined criminals.”
“Success will depend upon the public having confidence that no legitimate adviser or pension provider would approach them in this way. The government, pension providers and the regulatory bodies will need to do more to stamp out this crime.”
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