UK MPs call for immediate pensions cold call ban
The UK government should fast track legislation to ban pensions sales cold calling to stop scammers taking thousands of pounds from unsuspecting savers, a parliamentary committee demanded on Monday.
In a report, the all-party Work & Pensions select committee said the government's present timetable for regulation of the sector was “not urgent enough”.
The government relaxed pension rules in 2015, giving people the chance to access their pension pots early.
At least £43.9m has been lost to scams in the three years to May 2017, according to government figures, but the committee warned the actual figure could be much higher.
It said the combination of high financial value and low saver engagement has made pensions a scammer's "perfect storm”.
The committee said scam investments were usually high risk, highly illiquid and unregulated. It heard of examples like schemes to invest in "diamonds, overseas property developments, store pods, forestry and film".
“The Pensions Regulator said that the extent of scamming was 'considerably under-reported' and referred us to an estimate by Margaret Snowdon, the Chair of the Pensions Liberation Industry Group,” the committee said.
“She said she was “reasonably confident that £1bn has gone to scams”, more than 20 times the (government) figure. Indeed, she said it had been estimated that £10bn had been lost.”
Committee chairman Frank Field said every day that passed without a ban meant people were being “avoidably conned out of their life savings”.
“There is no need to overcomplicate this: our proposal would see an enforceable ban in place by summer, closing at least one door on rafts of scammers at a stroke,” he said.
“Low saver engagement and high financial value makes pensions rich pickings for scammers offering fantastical returns or seemingly clever advice. The strongest weapon in the armoury against this is good advice and guidance - people just aren’t taking it.”
Yvonne Braun, Director of Policy, Long-term Savings and Protection, at the Association of British Insurers (ABI), said:
“People’s life-savings must not be left vulnerable to scammers and con artists. With mortgages already protected by a cold-calling ban it is high time pensions were given the same level of protection. Further measures to prevent fraudsters switching to spam emails and texts will also be important."
“Savers need to be clear that any unsolicited contact about their pension is not to be trusted – they should instead seek quality guidance from PensionWise and The Pensions Advisory Service, and advice from regulated financial advisers.”