Pension and insurance companies have welcomed government plans to ban cold calling on all financial products.
The UK government will announce a blanket ban on these unsolicited calls as part of wider crackdown on scams. This will include more resources to tackle pension scams and other financial fraud, via a new fraud squad which will have 500 investigators.
There is a already a ban on cold calls on pensions, introduced in 2019, but it is hoped this new legislation will tackle the growing problems with fake insurance products and cryptocurrency schemes.
The news comes as new figures show less than a third of report connecting pension fraud at investigated by the policy.
Quilter, the financial adviser and wealth manager, submitted a freedom of information request which revealed that over the last eight years Action Fraud received more than 4,000 cases concerning pension fraud, but only 1,173 were disseminated to local police forces for investigation. It said that in some years just 6 per cent of received cases were passed on to police authorities. No figures are available to show how many these resulted in criminal convictions.
According to Action Fraud the average loss to each victim of these pension frauds is around £75,000.
Given the scale of the problem pension firms welcomed renewed action to tackle financial scams in all forms. Standard Life managing director for customer Dean Butler says: “People have a right to know who they are dealing with and cold calling can muddy the waters creating opportunities for fraudsters.
“Building on the 2019 move to ban pension cold calling and extending it to all financial products has the potential to reduce the scourge of financial fraud which causes a great deal of pain. While pension fraud still exists, there is widespread recognition that the cold calling ban was a step in the right direction which ultimately has made people more cautious of unsolicited pension review calls and other tactics previously employed by some fraudsters.”
Quilter head of retirement policy Jon Greer adds: “Unfortunately, especially during economically difficult times, scammers thrive. These figures show that over the past few years, as finances have been stretched, many more scams have had to be passed on to local forces for investigation. This shows why it is important that the government’s new strategy gets a grip on fraud.”
He adds: “The pension transfer regulations brought in 2021 have had a positive impact on highlighting scams. However, even with those regulations in place scams are still being perpetrated making the Online Safety Bill an important piece of the puzzle.
“Getting retribution for a pension scam can be tricky so we should be going to the root of the problem and that starts with getting the Online Safety Bill over the line. The government continue to risk people losing their life savings while this legislation stalls.”