There is clearly a need for a ban on pension cold-calling, but critics say there is much more that needs to be done to protect innocent people from scammers stealing their life savings.
One of the problems with banning cold-calling in the UK is that many of the fraudsters have simply moved offshore and out of the jurisdiction of UK legislation.
Michelle Cracknell is chief executive of The Pensions Advisory Service which provides impartial guidance regarding pension funds.
She claims that whilst the ban is a good thing, the rewards for these scammers are so high that they will find a way around the legislation by using technology and social media.
The fraudsters simply obtain lists of people who have, at some time in the past, used a company for PPI (payment protection insurance) claims, or those who have completed PPI surveys but have not proceeded to make a claim.
The fraudsters know that these people are probably more vulnerable and less able to handle their money than most, so they make relatively easy victims.
In a recent case, a pair from Dorset, Anthony Locke and his partner Ray King, were both jailed for running an elaborate £1 million ‘pension liberation’ scam.
They managed to convince customers to transfer their pensions to their scheme called ‘Successful Pensions’, promising easy access to half of their money should they need it.
They claimed that the rest would be put into investments to maintain the Amazon Rainforest – a cause close to many people’s hearts.
Not surprisingly there never was such a scheme and investors lost their life savings to the pair.
Former nurse, Suzanne Kroll, 62 (name has been changed), was cold-called about her pension and ended up losing almost £40,000 as a result of the scam.
Suzanne had this to say:
“More publicity is needed about these ruthless people who are effectively moving in on people who don’t know any better and stealing their savings.
“It makes me feel quite sick that I was so gullible and that these fraudsters have my hard-earned savings in their pockets to spend as they wish.
“I no longer live in the UK, but it is my understanding that not enough publicity is given to warn people of the dangers of these scams. The government needs to launch a major publicity campaign to save other people from the trauma that I have suffered.”
“I got a call in 2012 from a competent sounding chap who then came to my house and showed me some impressive financial information on his laptop. The whole thing looked very professional indeed.
“The problem was that I did not know enough about pensions to even ask the right questions, and he sounded so competent and reassuring that he completely won my trust.”
After her initial pension investment underperformed, Suzanne was persuaded to transfer her money to a different fund – for a further fee, of course – and, along with other savers, her savings quickly disappeared altogether.
The best advice possible is just to ignore anyone who cold-calls you offering you a free pension review or financial guidance – they are almost sure to be con-men.
If you have any concerns about your finances or think your money could be put to better use, always seek advice from a licenced and regulated Independent Financial Adviser.
For a list of FCA (Financial Conduct Authority) advisers, click here to find one near you.