You know you’re on the side of right when everyone agrees. It doesn’t happen often. But the government’s move for a swift ban on pension cold-calling is one of those times.
To have the government, regulators, the Work and Pensions Committee and industry all lined up in support of a ban as soon as possible shows that it’s the right thing to do. That there are no voices in opposition speaks volumes.
The need for swift action is clear. Despite the many warnings that we have made about fraudsters using cold-calling to prey on people, pension holders continue to fall victim to them. Just last month we announced that we had launched an investigation with the police into a number of pension schemes we believe are linked to cold-calling.
Separately, in January we successfully persuaded the High Court to make an order that four scammers have to repay £13.7 million they took from the pension funds of their victims.
The order is important for several reasons. It shows that the High Court agrees that it is important to separate the scammers from the money they took. It paves the way for the assets of the scammers to be seized for the 245 victims in this case. It sends a clear message that we will go after scammers who target pension holders.
And the High Court action won’t be the end of the matter for the scammers. We’re considering what other action we can take against the scammers and have also referred the case to the Director of Public Prosecutions to consider if a criminal prosecution should follow.
But the need for action like this will be reduced if the cold-calling ban prevents pension holders from falling victim to the scammers in the first place.
Unfortunately the truth, stark as it may sound, is that those who do hand their funds to scammers are likely to see very little – if any – of it ever again. Scammers don’t stockpile the cash they empty from pensions, they fritter it away. Often by the time victims have alerted us to a scam the pounds have already been gushing out their schemes for many months, if not years. There’s no point in us trying to sugar coat the situation – the damage is done the moment you transfer your pension out of a safe scheme and into the unknown.
What we can do – as in the case we took to the High Court – is to help victims salvage what we can from the crumbs that are sometimes all that is left behind and take action against those responsible.
It’s a far from reassuring message but then pension holders shouldn’t be reassured – they should be wary, questioning, and suspicious of everything they are promised when pressured by someone to transfer their pension into a ‘golden opportunity’. As we’ve said many times before, if it sounds too good to be true, it almost certainly is.
For some time we have warned that a cold call about your pension is an attempt by fraudsters to steal your money and we’ll continue to stick to this message. The pension cold-calling ban is so welcome because it will be clear to everyone that such activity is illegal. We all need to do our bit to make sure the message spreads swiftly, to prevent more people becoming scam victims.
By Mike Broomfield
Head of Intelligence