The government is fast forwarding measures to prevent pension scams, which includes banning emails and text messages as well as cold-calling. Stuart Price, Partner and Actuary at Cardiff-based Quantum Advisory, welcomes this and thinks it’s about time firm action was taken.
“Pension scams are generally unregulated investments offering ‘guaranteed returns’. These include exotic sounding investments like hotels, vineyards or other overseas ventures. As well as losing their pension savings, individuals could also get a huge tax bill. “There is an estimated 250 million cold calls made each year offering members of the public free pensions review or incentives to release pension funds early, but the fraudsters don’t stop there. They send emails and texts which are just as convincing and dupe innocent people out of their retirement funds.
“This blanket ban on all cold calls, texts and emails will send out a clear message to the public that no legitimate organisation will contact them about their pensions, so if they are contacted, they’ll know it’s a scam. The heavy fines – up to £500,000 – for companies that flout the ban should also reduce the amount of fraud too. However, there is still much more the government needs to do.
“A government review into the restrictions on pension transfers needs to be carried out and it needs to be made easier to block a transfer if it is suspected that a fraudulent scheme is involved.
“The government also has the ability to cut the fraudsters off before they’ve begun by making it more difficult to establish fraudulent pension schemes.”
Established in 2000, Quantum Advisory provides pension and employee benefits services to employers, scheme trustees and members from offices in Cardiff, Bristol, Amersham, Birmingham and London.