PENSIONSANDSAVINGS.COM

31 October 2016

Nobody likes to hear about pensioners being mugged, or robbed of their life savings.  Unfortunately, thousands of older people have suffered such indignity at the hands of pension scammers.  It is time the Government took this issue seriously.  There are no easy answers, but a ban on cold-calling would certainly help.

Most pension scams start with a cold call, someone phoning or emailing out of the blue, offering a free ‘pension review’ or an exciting investment opportunity that is too good to miss.  Soon after that you can find your life savings are gone, and you may even have a large tax bill to pay too.  Thousands of people’s lives have been ruined by such scams.

That is why it is so important for the Government to do whatever it can to clamp down on the fraudsters.  In the past few years, thousands of pension scam schemes have been reported but no convictions have resulted.  It can take years to investigate these incidents, and of course once a scheme is discovered it is usually too late – the pensioners’ money is gone.

We must do more to protect the public and make it much harder for the scammers.  As cold calls are such a common way of beginning the scam, let’s make them illegal.  After all, if we can ban cold calling for mortgages, why not extend this to pension ‘reviews’ and investments.

Of course this won’t stop all scams.  Yes, ideally we should also stop pension companies from transferring money into these scam schemes, but that is harder and at least banning the initial cold call is a start.  It would make scams harder and, perhaps most importantly, would send a strong message to the public that such cold calls are dangerous.

It could also be more effective in securing convictions.  Proving fraudsters have broken the law by cold calling is pretty straightforward, but convicting someone for a pension scam is impossible in advance – the authorities must wait until the investment has collapsed.  By then people’s money has gone so it is too late to actually help.  We must do more to prevent the problem, rather than sweep up afterwards.

When I was Pensions Minister, I wanted to do this, but my advice was that making such cold-calling illegal would be difficult – and would not work.  I pushed back but officials were always adamant.

Numerous reasons were suggested.  I was told the Government does not want to stop bona fide businesses from cold calling people and would prefer to focus only on the fraudsters.  This is unacceptable.  Reputable companies should not call you out of the blue about your pension.  Firms will have to find better ways to gather clients than cold-calling.

I was advised that most scams originate overseas so a ban would not be effective.  In fact, the Government does not actually know where scams start and some calls definitely come from the UK.

I was also told we would introduce ‘Caller Line Identification’ so people could track where the calls had come from, but that does not address the problem.  We have the Regulator, the Police, the FCA and other agencies all working together to try to address this and also to catch those who are responsible wherever that is possible, but so far to almost no effect.

So let’s just get on with banning these cold calls and give people a fighting chance to fight back.  Send a clear message to the public that someone who tries to contact you out of the blue about your pension will be acting illegally and, if you do get such a call ‘Just Hang Up’.