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Proposals to ban cold callers targeting pension savings

Published 23/11/2016

A ban on cold callers tricking people out of their pension savings forms part of the plans contained in the Autumn Statement
A ban on cold callers tricking people out of their pension savings forms part of the plans contained in the Autumn Statement

A ban on cold callers tricking people out of their pension savings forms part of the plans contained in the Autumn Statement.

Chancellor Philip Hammond will outline plans to stamp out pensions cold calls, during which scammers may offer victims a "free" review of their nest egg, extra tax savings or access to their pension before the age of 55.

Under the proposals, calls where a business has no existing relationship with someone will be forbidden.

This includes fraudsters targeting people who inadvertently "opt-in" to receiving third party communications.

Enforcement action by the Information Commissioner's Office (ICO) could include fines of up to £500,000 for firms trying to breach the planned ban.

Cold callers often present scams as "unique investment opportunities", such as putting money into a new hotel in an exotic location or into "ethical" projects that promise too-good-to-be-true returns.

It is hoped the crackdown will help bring an end to the misery caused by the 250 million scam calls - the equivalent of eight a second - made in the UK every year.

The Government has said nearly 11 million pensioners are being targeted annually by cold callers. Savers are thought to have lost almost £19 million to pensions scams between April 2015 and March 2016.

As well as losing their life savings, victims can also face hefty tax charges.

There have also been concerns that the pension freedoms launched in 2015, which give over-55s more choice over how they use their retirement savings, could make them a particular target for fraudsters.

Mr Hammond also plans to consult on a wider crackdown on pensions scams, including giving more powers to firms to block suspicious transfers, preventing people's life savings being transferred into scams without any checks and making it harder for scammers to open fraudulent pension schemes.

Research suggests fraudsters could be behind as many as one in 10 pension transfer requests and the proposed measures are intended to prevent scams happening in the first place.

The plans have been welcomed by former pensions ministers Steve Webb, now director of policy at Royal London, and leading pensions expert Ros Altmann.

Baroness Altmann has said : "If a firm wants to generate new customers, they will have to find better ways than just buying up lists of contact details and cold calling people."

Citizens Advice has said cold calling is a "favoured tactic" of fraudsters targeting people's retirement savings.

And Vickie Sheriff, director of campaigns and communications at Which? said: " No legitimate pension or investment firm will ever cold call you about releasing cash from your pension, accessing it before you are 55 or extra tax savings, so alarm bells should ring if they do."

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