From today, firms aren’t allowed to cold call someone who isn’t already a customer. If they do, they could be fined up to £500,000. But will the pensions cold calling ban work?
Pensions cold calling banned
Pensions cold calling has been a huge problem since pension freedoms were introduced in April 2015. Thousands of people have been fleeced out of their pension savings by fraudsters who’ve persuaded them to move their pension. On average, people who’ve been fleeced by pensions fraudsters have lost £91,000 each.
In many cases, they’ve been targeted by firms that cold call them. The ban on cold calls, which comes into force today (9th January) will mean that it’s against the law for a company to cold call anyone about their pension unless:
- They are regulated by the Financial Conduct Authority or run a workplace or personal pension scheme, and
- You’re already a customer of the firm or you have a pension with the company in question or you have agreed to be contacted by phone.
What to do if you get a pensions cold call
If you get a pensions cold call, the most important thing is not to act on what you’re told. The straightforward advice is to put the phone down. If you feel like it, you can try and get information about the company making the call so you can report them to the Information Commissioner’s Office (ICO).
You can do this by ringing the ICO on 0303 123 1133, or you can report the cold call via their website. The Information Commissioner has the power to impose fines of up to £500,000 on firms that cold call people about their pensions.
SAVVY TIP: When I’ve been cold called by claims management companies in the past, they’ve given a false name and have ‘spoofed’ their number, so a false one shows up on your phone, so it may not be as easy to report the cold calling fraudsters as you think.
What the ban doesn’t cover
The pensions cold calling ban only covers cold calls made from the UK. It doesn’t cover cold calls made from abroad. It pensions cold calling ban also doesn’t cover emails, texts, WhatsApp or contact via social media. However, figures from Citizens Advice do show that around 97% of pensions fraud cases it dealt with were the result of cold calling.
When the government originally announced that it was going to introduce a pensions cold calling ban (in the autumn of 2016), it didn’t include texts or emails in its plans. After it was lobbied by the pensions industry, it decided to include them. However, during the consultation period, the government decided against including emails, texts and social media. It says these are already covered by other legislation.
I do think it’s a huge shame that this ban wasn’t in place before the pensions freedoms were introduced in April 2015.
Will the pensions cold calling ban stop cold calls?
The measure to ban pensions cold calls won’t stop them. Many of the people who make pensions cold calls are criminals – so making something illegal won’t be a deterrent. However, I do think it’s useful in that it’s easier to get the message out that anyone who cold calls you about your pension (unless it’s your own pension or investment company) is doing so illegally.
What to do if you get a text or email about your pension
If you get a text, social media message or an email, ignore it and delete it. You should report it to the Information Commissioner’s Office (details as above).
The GDPR (data protection) regulations which came into force last May make it illegal for companies to contact you without your permission anyway. There are also strict rules about how they acquire your details.
If you’re thinking of transferring your pension
Transferring your pension is a serious step. There may be some good reasons for doing this, but it isn’t something you should do without taking advice and without a long and hard think about what you’re giving up and the costs of transferring. If you’re thinking of transferring a final salary pension, in most cases it’s not a good idea.
SAVVY TIP: Be very wary of anyone who promises you a better return if you transfer your pension. Returns are very hard to predict and certainly aren’t guaranteed.
If you’re not sure what to do, get help from the new Single Financial Guidance Body, which incorporates Pension Wise, the Pensions Advisory Service and the Money Advice Service.
SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.