The pension cold calling ban is here. Consumers, regulators and police officers alike should celebrate.
Banning contacting pension holders out of the blue should mean the number of people who are phoned by scammers – and then fall victim to them – will plummet.
The move by the government to make good on its pledge to make pension cold calling an offence sends a strong message to those who would target pension savers. But we need advisers to help make it as effective as possible by doing their bit.
Most people with defined benefit pensions will have to take appropriate independent advice from an FCA-authorised adviser before transferring their benefits. Advisers may therefore be the first people to learn about a planned transfer. A clear warning from them to their customers about the dangers of suspicious-looking schemes could be enough to prevent a scam.
We are asking advisers to direct their customers to first visit fca.org.uk/scamsmart before they consider transferring their funds. There the customers will find information about the warning signs of scams as well as detail on how they can check on the authenticity of schemes and how they can report attempts to scam them. We need customers to report scam attempts to Action Fraud on 0300 1232040 or via actionfraud.police.uk even if no money is handed over, so we can tackle those responsible.
This is not about increasing the workload of advisers. This is about helping them to provide the best advice possible to their clients.
The arrival of the ban should bring clarity for consumers that if the phone rings and the caller asks unsolicited questions about their pension, it is an attempt to steal their savings.
The important word in that sentence is “unsolicited”. The law does not make it an offence for a pension provider to contact its own customers, for example. But we do not want consumers to feel under pressure to have to make a decision about whether a call is unsolicited or not. Instead, we want them to feel that if they are in any doubt whatsoever, they should simply hang up. Advisers can play a key role in helping to deliver this message.
We are also keen for consumers to understand that websites are used by scammers to identify new targets. Pension holders who register online for information about transferring their pension leave themselves open to being approached by scammers. Just because websites look impressive doesn’t mean they are not being used by fraudsters to lure victims in – after all, all that glitters is not gold. Again advisers, as well as administrators and trustees, can help educate the public by urging pension holders to be extremely cautious about online offers.
We should be clear that while the ban criminalises cold calling in the UK, it is unlikely to bring an end to scam calls completely. Fraudsters both in this country and abroad will continue to try to steal pension pots and we, other agencies and the police will work to stop them and bring them to justice.
The cold calling ban draws a line in the sand for criminals. Those who cross it should expect to be prosecuted.
We will continue to be vocal about the threat of scams to help pension holders understand how they can avoid becoming a victim.
We will continue to call out the signs of a scam – the offers of free pension reviews, to access cash from pensions before consumers turn 55, higher returns, time-limited offers and complex, exotic, unregulated investments.
But we can’t do it all by ourselves.
While hundreds of thousands of people have visited ScamSmart for information about scammers since we launched our awareness campaign last summer, we are often not the first people that consumers turn to for information about their pensions.
Some will turn to friends and family for advice. Some will access information via the new Single Finance Guidance Body or through Pension Wise.
But a large proportion will rely on the advice and guidance of their pension scheme administrators, trustees and financial advisers.
That’s why it’s vital that we continue to bang the drum about scams to help pension holders spot the signs of a scam and explain where they can get more information.
If anyone calls a consumer out of the blue about their pension, it’s an attempt to steal their savings. We can all do our bit to stop the scammers by sharing that simple truth.
By Nicola Parish
Executive Director of Frontline Regulation