Under new plans, designed to protect consumers from scams, companies making cold calls about pensions could receive a fine of up to £500,000 going forward.
This follows a recent report that shows up to 250 million of these types of calls every year. In addition to this, according to the FCA (Financial Conduct Authority), in fraudulent calls, an average of £91,000 was stolen from each victim.
In light of this evidence, the government has taken action to protect savers from “crooks”. The ban comes into effect this week, and affects calls offering pension reviews and high returns. It also bans callers from using high-pressure selling techniques, as a lot of pensions are complex.
Pension scammers were recently described by the economic secretary, John Glen, as “the lowest of the low”. He said in an interview: “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.”
The ban was originally announced in 2016 by Philip Hammond, who at the time was Chancellor. It’s been delayed several times, but after two years, consumers will now be protected from certain types of cold callers.
It doesn’t affect companies that are regulated by the FCA, or by a personal or occupational pension scheme: these types of calls will still be permitted, as well as companies that already have a relationship with the customer.
The news has been welcomed in the industry. Lesley Titcomb, chief executive of the Pensions Regulator, noted: “The cold calling ban sends a very clear message. If anyone calls you about your pension, it’s an attempt to steal your savings.”
Guy Opperman, Minister for Pensions and Financial Inclusion, also commented: “Banning pensions cold calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law.”