The Government petitions website now includes a petition which states: “Cold calling on investments and pensions to members of the public very often leads to unregulated investment and scams. Banning cold calling would dramatically reduce the number of people falling prey to fraudsters and losing their savings and pensions.”
The petition – started by Darren Cooke, a financial adviser at Red Circle Financial Planning in Derbyshire – has already attracted over 3,500 signatures and has the backing of a number of networks of financial advisers. Reaching 10,000 signatures will require the Government to respond formally.
Phil Loney of pension provider Royal London, which is one of many big names to have backed the campaign, says: “Unless tougher action is taken on cold-calling, vulnerable people will continue to be at risk of unscrupulous sales calls which can put their savings at risk.”
Don't get caught by pension freedom scammers
Fraud losses higher than thought
Indeed, the threat of losing all of your retirement fund to a criminal is very real. Fraud losses in the period following the introduction of pension freedoms (which allows savers to access every penny of a retirement fund) could be 25% higher than initial estimates, analysis of City of London Police statistics suggests.
Previously, it was thought some £10.6m of pension fraud losses had been reported to City of London Police in the six months following the introduction of the pension freedoms in April 2015. However, updated statistics reveal the figure has been revised up to £13.3m – 25% higher than the original estimate.
Four golden rules of spotting the pension scam sharks
Don’t fall for a pensions scam
Fraudsters know that since April 2015, people have had direct access to their retirement savings and can withdraw lump sums. So they are bombarding people aged 55 and over with bogus investment opportunities.
If you invest in these fake deals you could lose your life savings and have nothing left for retirement.
They might try to lure you in with a free pension review. Other conmen try to trick victims into pulling money out of pensions early.
If you withdraw money before you turn 55, you can be hit by the taxman, with charges as high as 55 per cent.
Stay alert: con artists can approach you by post, email or phone. If you are in any doubt, take advice from a registered independent financial adviser.
If you think you may have been targeted by fraudsters, contact Action Fraud on 0300 123 2040.
Low interest rates on savings accounts are cited as another reason why people are being tempted to take on extra risk with new schemes, not realising that they could get caught out by fake investments.
Experts are calling for schemes to stress test their systems against fraud.
The 2016 Autumn Statement
In November 2016 during the Autumn Statement, Hammond announced he was launching a consultation into whether cold-calling by financial firms in relation to pension and other types of investment should be banned as part of a wider crackdown on pension-related fraud.
Nici Audhlam-Gardiner from Saga Investment Services commented: “Saga welcomes the consultation into cracking down on pensions scams. Cold calling is a real concern for older people. Many of these individuals have worked and saved hard all their lives to provide for their futures and it's absolutely right that the Chancellor puts in place measures to protect people from these unscrupulous scammers who often target the most vulnerable in society.”
The 2016 Autumn Statement examined
Enjoyed this article?
You can find more of the same in our Money hub, offering advice, tips and news on all things financial, or you could sign up for our Money newsletter to enjoy more articles like this delivered to your email inbox each week!