The Information Commissioner’s Office to enforce cold calling ban to protect savers
22 August 2017
The government received 111 responses to its December 2016 consultation that contained three proposals for interventions aimed at tackling pension theft through scams.
Whilst a number of respondents had suggested that the government could and should go further by taking a significantly tougher approach, the majority of respondents were supportive of government proposals.
The consultation response sets out the feedback the government received and its intended next steps.
The measures will include:
- A ban on cold calling in relation to pensions which will also include emails and text messages. The government will work on the final details of the ban on cold calling in relation to pensions during the course of this year and bring forward legislation to deliver the ban when parliamentary time allows
- A tightening of HMRC rules to stop scammers opening fraudulent pension schemes will see government also introduce legislation in a Finance Bill later in 2017 that aims to ensure that only active companies can register a pension scheme and will introduce additional changes to the scheme registration process, this in addition to engaging with industry, consumer groups and other stakeholders to consider feedback on options to professionalise small self-administered schemes
- Tougher actions to help prevent the transfer of money from occupational pension schemes in to fraudulent ones will be implemented and further engagement with stakeholders on how best to achieve this will be carried out
The cold calling ban will be enforced by the Information Commissioner’s Office (ICO) who have a number of enforcement powers amongst which include the issuing of monetary penalties of up to £500,000.
Almost £5 million was obtained by pension scammers in the first five months of 2017 and it has been estimated that £43 million has also been unlawfully obtained by scammers since April 2014, with those targeted having lost an average of nearly £15,000. Scammers get savers to part with their money with false promises of low-risk, high-return investment opportunities.
The lesson to be taken from this – if it seems too good to be true it probably is.
The minister for Pensions and Financial Inclusion Guy Opperman warned:
“…figures highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again. That is why we are introducing tough new measures for those who scam…this is the biggest lifesaving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
Economic secretary to the treasury Stephen Barclay also commented:
“It’s utterly unacceptable that people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket.
Pensions are often the most valuable asset a person has upon reaching retirement – and that’s why we are determined to crack down on scammers and protect our hardworking savers.”