The government is making plans to outlaw cold calling about pension investments - in a bid to wipe out pension scams. However, the experts warn that a fatal flaw in the plan will leave the door wide open for criminals taking vulnerable pensioners to the cleaners.
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The proposals, announced during the Autumn Statement, are an effort to clamp down on the scourge of cold calling scammers. According to the Treasury, 11 million pensioners are targeted every year by cold callers. Between April 2015 and March 2016, they stole around £19 million of their savings.
The government is proposing legislating against these cold calls. It has already made it clear that it doesn't expect criminals to comply with the ban, and shut up shop entirely. However, the ban will mean that anyone who receives a call from someone offering them a 'free pension review' or a 'unique pension investment', knows they are speaking to a scammer - whose primary aim is to part them from their savings.
The details of the ban are being consulted on at the moment. Unfortunately, in its response to the consultation, the ABI has pointed out the fatal flaw.
Introducing a narrow ban like this will simply shift scammers sideways - into sending emails and texts along exactly the same lines. It won't stop the scammers from operating at all.
To make it truly effective, the ABI is calling for the government to extend the ban to any kind of contact out of the blue on this subject. Yvonne Braun, Director of Long-term Savings and Protection Policy at the ABI, said: "The ban on cold calling announced in the Autumn Statement is a good first step but the Government needs to ensure consumers are fully protected from the pension cowboys – they should not be allowed anywhere near people's life savings. "Banning cold-calling and other measures in the consultation should help, but we need to make sure cold calls aren't just replaced by a deluge of spam emails and texts. That's why we think further measures to stop fraudsters from using other forms of technology need to be considered by the Government."
It has also warned that unless the government takes serious and committed steps to publicise any ban, pensioners won't get any benefit at all from it. They will continue to answer calls, be persuaded that the scammers are there to help, and will be conned out of tens of thousands of pounds of their savings.
We can only hope the government heeds their warnings, and that when this move finally makes it into legislation, it's robust enough to actually protect pensioners in the way it is intended to.