Although pension cold calling has been banned in the UK, consumers are still falling victim to phone scammers. We look at why this is happening and what to do if you receive a call…
Pension cold calling was banned by the government earlier this year, after being identified as the main tactic that scammers or unscrupulous financial advisers use when targeting victims.
It has been reported that 10.9 million unsolicited pension cold calls are made every year, according to the Citizens Advice Bureau, and – as reported by the FCA – the average amount of money stolen by pension scammers was an incredible £91,000 per victim.
Since January 2019, any firm found to be breaking the new rules and using cold calling in relation to pensions could be handed a fine of up to £500,000.
Exceptions to the ban
The ban covers cold calling relating to pensions, but does have some exceptions. If the caller is FCA authorised, or if the client has an existing relationship with the caller, they may be exempt from the ruling.
Additionally, as the ban only applies to UK firms, some firms will simply change their location rather than changing the way the operate. Moving operations overseas will allow them to get around the ban as they will no longer be under UK jurisdiction.
Our expert Glyn Taylor comments: “Unfortunately, the ban has not completely put an end to cold calling relating to pensions. Scammers use the above exceptions to get around the ban, often lying to potential victims about being FCA approved, claiming to be from governmental organisations such as The Money Advice Service or PensionWise, or even your existing provider. Others simply move their locations overseas.
“These scammers are robbing people of their well-earned retirement funds, which has a devastating effect on hard-working people’s lives.”
Fortunately, there are a few things you can do to protect yourself against these unscrupulous scammers.
1. Reject any unsolicited pension cold calls
Firstly, it goes without saying – if you receive ANY cold or unexpected calls relating to pensions – hang up. If you do answer, try and find out information about where they are calling from and any contact details, but avoid giving out any personal information whatsoever.
2. Seek independent advice
If you do want to seek out some genuine advice about pension investments, you can call PensionWise for independent advice. You can also contact legitimate advisers using your online research and vetting process.
Unsure about a call? You can always take the contact details of the adviser and call back using the number provided for the firm online. A genuine firm won’t mind the delay, and there will be a note on your file about any previous contact.
3. Check the FCA’s register
A simple way to find out the legitimacy of a firm is to check the FCA’s register of companies who are regulated and authorised. The FCA also has a warning list, which is also worth looking at. For more information on spotting a scam caller, see our guide here.
4. Register with the Telephone Preference Service
Although this will not stop some unscrupulous scammers, one way to ensure you don’t receive as many unsolicited marketing calls is to register with the TPS service. Once registered, it then becomes illegal for any firm in the UK or EU to call you. It can take up to 28 days for calls to stop.
5. Report any scam calls
The FCA has a handy website where you can find out more about scam tactics and report any contact. Check out the ScamSmart site and make sure you always report any unsolicited contact.
Did you invest in a pension scheme following a cold call? Get in touch with our team to discuss financial mis-selling.