A crackdown on pension scams has been outlined by the Government, as figures show fraudsters tricked savers out of nearly £5 million collectively in the first five months of 2017.
Actions include a ban on all cold calling in relation to pensions, including emails and texts; a tightening of rules to stop scammers opening fraudulent pension schemes; and tougher action to halt the transfer of money from occupational pension schemes into fraudulent ones.
The cold calling ban will be enforced by the Information Commissioner’s Office (ICO).
There will be two exemptions from the proposed ban to ensure legitimate businesses are not affected - calls where consumers have expressly requested information from a firm and those where an existing client relationship exists.
The Government is also tackling scammers by ensuring that only active companies, which produce regular, up-to-date accounts, can register pension schemes.
Limiting transfers of pension pots from one occupational scheme to another will mean trustees must check their receiving scheme is regulated by the Financial Conduct Authority (FCA), or has an active employment link with the individual, or is an authorised master trust.
Victims of pension scams stand to lose nearly £15,000 on average, as fraudsters try to encourage savers to part with their money with false promises of low-risk, high-return investment opportunities.
The pension freedoms give people a wider range of options as to how they use their savings, and some scammers may see these savers as a particular target. The Government-backed Pension Wise service gives guidance to people about their options.