In the Chancellor’s recent Autumn Statement, one of the proposed bills was for a ban on pensions cold calling. Such cold calling has been increasing rapidly since the introduction of pension freedoms in 2015, so we welcome this proposal. However, will the proposed legislation go far enough?
Cold Calling and Pension Scams
We have commented on this is. Re-visiting the point, we are in no doubt that pension freedom has resulted in a significant growth in pension scammers cold calling people, especially vulnerable people, to try to get them to part with their pension savings (now available from age 55) and invest it in high return schemes which were, in fact, bogus.
A ban on such cold calling has to be good news, for the individuals who would have been targeted and for the financial services industry itself.
Does the Proposed bill go far enough?
Only time will tell, of course, as the bill is debated and makes its way through the parliamentary process. A few things spring to mind, however.
- The ban, however it is enforced, will not cover unsolicited emails or calls from outside the UK, so the problem will not go away completely.
- More detail is required on how the ban will be enforced and the penalties for those caught transgressing.
- It is far from clear from the current wording of the bill as to what constitutes a cold call. For example, would a call to alert a pension scheme member about their approaching retirement date, their retirement options and other things they need to take into consideration be counted or not as a cold call? Of course it isn’t a cold call, but the wording isn’t very clear yet.
Above all, although the bill is most welcome, assuming it gets royal assent, it does not mean that the practice of cold call scamming will stop entirely. In which case the advice that we always give remains good:
- Be vigilant at all times when you receive a call from somebody you don’t know who tries to sell you a financial product that sounds too good to be true. This is because it almost certainly is too good to be true. You should not engage with all unsolicited phone calls of this nature, no matter how plausible they might sound, and put the phone down.
In the meantime, for help and advice on pensions, or call us on 0121 693 0690.