Today is an important one for those at risk of being defrauded out of their occupational pensions by cold calling scammers. From today, it will be illegal to cold call or text individuals to encourage them to transfer their safe and valuable pension into risky and usually fraudulent schemes.
Such activity is now subject to a fine of up to £500,000. But…and it is a big but…there are still several loopholes that criminals can seek to exploit to get around the ban. The main one of course is that this only covers calls or texts which originate in the UK. Overseas scammers will still have Carte Blanche to flout the law.
The problem started to rear its ugly head in earnest after the law was changed to allow people to access their pension savings before they came to retirement. The so called ‘pension freedoms’ opened up a whole new world for criminals to prey on vulnerable or misinformed people who, when mouth-watering investment returns were dangled like a carrot in front of them, transferred their pensions from their safe Defined Benefit Schemes into new defined contribution schemes from where the cash could be liberated and then usually lost.
The message in all of this is, in many ways, a simple one. NEVER respond to a cold call or text promising extraordinary high returns. NEVER respond to anyone you have never met or spoken to offering you a ‘pension review’. NEVER be pressured by a ‘fantastic opportunity that is about to expire’ . NEVER take any important financial decision without checking this with a reputable FCA authorised financial adviser. If you are the trustee of a DB scheme – always ask if a member who wishes to transfer out their benefits – have you decided to do this as a result of a cold call. Have you taken proper financial advice?
This new legislation will not stop the Scammers – they will always find a way – but it may just start to make things more difficult. And knowledge is power. The more people are made aware of these crooks, the harder it becomes for them to exploit the vulnerable.