Pension scammers face fines of up to £500,000

Companies making unwanted phone calls to people about their pensions now face enforcement action, which could include fines of up to £500,000.

Pension fraud can be devastating, leaving victims without the means to fund their retirement.

One of the most common methods used to commit pensions fraud is through cold-calls, which is why the UK Government has taken action.

Research by the Money Advice Service suggests that there could be as many as eight scam calls every second – the equivalent of 250million calls per year.

Lowest of the low

John Glen, Economic Secretary to the Treasury, said: "Pension scammers are the lowest of the low. 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."

According to the Financial Conduct Authority (FCA), pension scammers stole on average £91,000 per victim last year.

Guy Opperman, Minister for Pensions and Financial Inclusion, added: "Pension scams are despicable crimes, fleecing people of the retirement they’ve earned by doing the right thing, working hard and saving for the future.

"Banning pension cold-calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law."

Significant step

Jenni Allen, managing director of Which? Money, said the move is a significant step against increasingly-sophisticated criminals who attempt to scam people out of their hard-earned pensions.

She added: “However, this ban will not deter all scammers, so consumers should remain vigilant. A legitimate pension or investment firm will never contact you out of the blue to discuss releasing cash from your pension."

The ban prohibits cold-calling in relation to pensions, except where:

• The caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme.
• The recipient of the call consents to calls, or has an existing relationship with the caller.

If you receive a cold-call about your pension, you are urged get any information you can, such as the company name or phone number, and report it to the Information Commissioner’s Office via its website or on 0303 123 1113.

If you think you have lost money to fraud, report it to Action Fraud on 0300 123 2040 or through its website.

Pension advice

Aberdein Considine’s independent financial advisers - who are authorised and regulated by the Financial Conduct Authority (FCA) - can guide you through the pension maze and help you tailor a plan to your circumstances.

Click here to speak to one of our advisers.