The government is apparently planning to ban cold calling for pension and investment offers in an attempt to make life harder for scammers.
An announcement is expected in the next few weeks. The regulators have targeted pension scams for several years, and it hasn’t felt like they are making much headway, or that the problem has in any way diminished. The scammers have at every turn simply changed tactics to stay one step ahead of the game. Banning cold calling is a significant step in the right direction, and a move we would applaud, but it will be seen by the scammers as a setback rather than a defeat.
To the average man or women in the street, pensions seem complicated and, are well down the “to do” list on most peoples’ agendas. Thus when a “financial adviser” telephones you offering a “free” review of your pensions the offer seems too good to be true. Get an expert to look at your situation and tell you what to do all for free, why wouldn’t you agree?
Unfortunately, all too often those cold calling you have anything but your best interest at heart. They may be trying to scam you out of your money, or simply trying to get you to invest your pension benefits in some risky investments such as property development in Cape Verde. Some of you may have seen the Panorama program recently on this subject. All too often people have lost all, or a considerable part, of their pension benefits by making decisions which on reflection turn out to be the wrong ones. Thus whilst banning cold calling will make life harder for genuine advisers, it’s become necessary for the greater good of all.
Because of their size, pension pots are likely to remain favourite targets for scammers who will once again change tactics in response to this latest initiative. At the end of the day pension scheme members need to remain vigilant and if they are thinking of moving their pension benefits make sure they take advice from an adviser authorised by the Financial Conduct Authority.
Remember, if you are made an offer that sounds too good to be true, then it probably is.