Cold calling ban a golden opportunity but other dangers lurk

By Cherry Reynard

Added 21st November 2016

The government’s plans to crack down on pension cold calling have been hailed as a “golden opportunity” to correct the UK’s “disastrous” rules that are as much use as a “chocolate teapot”, says Angela Brooks of Pension Life.

Cold calling ban a golden opportunity but other dangers lurk

Her comments come after chancellor Philip Hammond outlined plans to ban cold calling and give firms the ability to block suspicious transfers.

Under the new regime, all calls where a business has no existing relationship with an individual would be forbidden.

Worthless investment opportunities

Brooks says more than 10 million pensioners are being targeted each year by cold callers in the wake of the UK government’s much lauded pension freedoms.

"Scammers are using the so-called freedoms to lure people into parting with their life savings by cold calling them with offers of non-existent or worthless investment opportunities,” she said.

“Mr Hammond’s announcement is a major step in the right direction and a golden opportunity to correct the disastrous, ‘chocolate teapot’-esque rules that have allowed so many people to lose their retirement funds.”

"Giving pension providers more powers to block suspicious transfers is something we've long-called for and will protect customers from future scams, but the devil will be in the detail.”

One tool of many

However, she says the government also needs to recognise that cold calling is only one of the tools in the scammers’ arsenals and that their techniques are constantly evolving. 

Kate Smith, head of pensions at Aegon, agrees: “Scams are constantly evolving as soon as you remove one fraud method, another variant on the old scheme pops up. A ban on cold calling won't be fool proof, but at least it will put more people on their guard and criminalise those who make the calls.

“Fraudsters try to ‘groom’ their victims making it difficult for pension providers to raise concerns with their customers about suspicious transfers or tipping off the fraudster.

"Giving pension providers more powers to block suspicious transfers is something we've long-called for and will protect customers from future scams, but the devil will be in the detail,” Shoesmith said.

Signs missed

A survey by Citizens Advice earlier this year found that nearly nine in 10 people missed common warning signs of a pensions scam - such as unusually high investment returns, cold calling and offers of free financial advice. 

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