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Devastating losses: Victims of pension fraud lost an average of £91,000 each from their life savings last year (Stock image)

Pension cold calling ban against scammers to start on January 9


Devastating losses: Victims of pension fraud lost an average of £91,000 each from their life savings last year (Stock image)

Devastating losses: Victims of pension fraud lost an average of £91,000 each from their life savings last year (Stock image)

A ban on unscrupulous sharks using cold calling to trick people out of their life savings will finally come into force on 9 January 2019.

The cold call prohibition is aimed at scammers trying to steal retirement pots and unregulated firms which persuade people to transfer money into unsuitable high-risk schemes.

Campaigners warn crooks will simply switch to new ruses – including calling from overseas to get round the UK law – but say that raising public awareness about the ban will put more people on their guard.

The Government first announced a ban on cold calling about pensions in November 2016, and industry experts and campaigners have voiced growing frustration about the delays. 

Last July, the ban was postponed again while it carried out a last-minute consultation.

The Government has not made a formal announcement about the start date, but Economic Secretary to the Treasury John Glen tweeted: ‘Pensions cold calling is a scourge, so I was pleased and proud to see Parliament pass a ban on it this week. 

‘This means the ban will officially come into force on 9th January. Spread the word.’ 

A copy of the rules is here. A ban on unwanted texts and emails is not included, but they are already restricted under EU regulations.

The Government was spurred into action in 2016 following a petition demanding pension and investment cold calling be made illegal.

Launched by Derbyshire-based financial adviser Darren Cooke, the petition said: ‘Banning cold calling would dramatically reduce the number of people falling prey to fraudsters and losing their savings and pensions.’

It attracted the backing of two former Pensions Ministers, Ros Altmann and Steve Webb, and a large band of pension industry supporters concerned by the heartbreaking losses suffered by savers.

Victims of pension fraud lost an average of £91,000 each from their life savings last year, figures from watchdogs recently revealed. 

Pension freedom reforms, which allow over-55s to access their entire retirement savings pots in one go, have made this money an obvious target for criminals.

Phrases pension fraudsters use that should set alarm bells ringing

The offer won’t last long

You’re entitled to a free government review

You’ll make a better return by investing in storage units/forests/overseas property

There’s a guaranteed 7 per cent return

We’ll send a courier over with your documents

Can you sign quickly – I’m parked on a double yellow line

There’s a legal loophole

You’re a sophisticated investor

It’s free

Your pension company might try to talk you out of it – they just want to keep your money 

Fraud experts say that a combination of new rules, investors looking for returns and pensioners withdrawing large sums of cash have created a potentially fertile hunting ground for conmen.

Citizens Advice statistics suggest 97 per cent of the pension fraud cases it deals with stem from cold calling. 

Last summer, financial watchdogs launched a TV, radio and social media campaign to highlight common fraud tactics and explain what to do if you are targeted.

Alistair Wilson, head of retail platform strategy at Zurich, said today: ‘The Government’s long-awaited ban on cold calling will disrupt one of the main routes scammers use to trick consumers out of their life savings.

‘When the ban comes into force within weeks, it will send a powerful message to consumers not to speak to firms who call them about their pension out of the blue.

‘However, wherever there is a large pot of money, fraudsters will find new ways to get at it. 

‘Scammers are likely to evolve new and more sophisticated tactics, and it is vital pension providers and consumers remain alert to this.

‘The ban is major step forward but it doesn’t cover cold calls made overseas, which is a loophole fraudsters could look to exploit. That’s why raising consumer awareness of the illegality of pensions cold calls is so vital to the ban’s success.’

This is Money has previously reported how sharks are using chilling methods to dupe people out of their savings.

Scammers are ‘grooming’ pension savers by giving them a script of what to say to get around company safeguards, according to financial giant Aegon. 

Customers are repeating certain telling phrases and technical terms not in common use when they ring up and ask for pot transfers, and sometimes admit they were warned to ignore attempts to talk them out of it, it says.

Meanwhile, The Pensions Regulator has warned fraudsters are also cut-and-pasting official scam alerts onto their websites to fool savers into thinking they are dealing with above board businesses. 

‘Watch out for scam sites that dress themselves up with anti-scam messaging to pose as legitimate businesses,’ it says.

Suspicious company websites have also been known to claim fraudsters were passing themselves off as their representatives, and to warn customers to be on their guard.

A common scam is claiming to be able to unlock money from an individual’s pension early, before the age of 55 – something known as pension liberation fraud, which can lead people to lose a pension pot and then face a 55 per cent tax charge on the vanished cash.

TOP SIPPS FOR DIY PENSION INVESTORS





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