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Can the ban on pension cold calls work?

After two years in the making a ban on cold calls regarding pensions came into force in January of this year. Pensions is a big topic for most of us and one that our London team has and will continue to cover to help spread the word about the benefits and options available. Just last month we covered how the government is proposing to help the self-employed save for their retirement. This month, we focus on this latest ban designed to deter fraudsters and take a look at how it will work and what you can do to help protect yourself. Can the ban work? Yes, if you still remain vigilant and alert to potential fraudsters. Our Plutus Wealth team of independent financial advisers is here to help and advise on pensions at any time – find us on www.plutuswealth.com.

What is it all about?

Pension cold-calling is a way for fraudsters to target unsuspecting, and often vulnerable, individuals and scam them out of their pension savings. As well as cold calls, fraudsters use a variety of methods such as texts, emails, and social media platforms to target innocent victims. However, cold calling is their preferred way, with the Money Advice Service reporting that in 2015 up to eight scam calls took place every second.

According to the Financial Conduct Authority (FCA), the average amount of money lost by victims of pension scams in 2017 was £91,000. Such scams can often rob victims of their entire pension savings, leaving them with nothing for retirement. In an effort to stop this from happening, the government introduced a ban on cold calling. This means that almost any unsolicited call that you receive is now illegal.

How does the ban work?

As of January, the majority of calls regarding your pension will be illegal. However, this does not mean that ALL calls are banned so you may still get them. To be sure that they are legal, though, they must meet both the following criteria:

  1. The caller must either be authorised by the FCA or be the manager or trustee of a pension scheme, AND
  2. They must have your consent to receive calls from them or have an existing relationship with you.

A call from anyone that does not fulfil both these requirements is a scam. Those that do continue to make such calls will be prosecuted and will face fines of up to £500,000.

What is excluded from the ban?

While this will go a long way towards reducing the amount of calls from fraudsters it will not eliminate them altogether. This is because some calls originate from outside the UK as many firms already have or will set up call centres overseas to circumvent this ban. It also does not target texts or emails, which fraudsters will no doubt continue to use. Social media is another growing platform they use to target people.

What should you do if you are targeted by cold callers?

While you may still get a cold call, it should now be easier to identify whether or not it is a scam. This way you can take appropriate action to protect yourself. If you do receive a call, think about the following:

If they are not, then you should:

If there is a chance that the call may be from an organisation you know but are unsure, hang up and call that organisation directly. They will have the details on file if they had a reason to call you and will be able to answer all your questions. Err on the side of caution and your pension can stay out of the hands of fraudsters.

Looking for some advice?

You can talk to us about pensions or retirement planning at any time. Our team of independent financial advisers are here to help and answer any questions you may have to help you make the right decision for your future and get the most out of your money. Our Plutus Wealth team is available on 020 7871 5200 or at info@plutuswealth.com whenever you are ready.

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