Important consumer protections and it’s only January!
11th January, 2019
As we embark on a new year, no one can ever really predict for sure what is lying in wait for us over the coming months. However, if I had to make a prediction, I’d stick to the topic of pensions and predict that pension scams will unfortunately continue. Run by unscrupulous so called trustees, false promises such as early access to cash and or guaranteed investment returns will continue to entice unsuspecting members of the public into scam arrangements ultimately leaving pension savings decimated. Why such a pessimistic prediction? Simple… it has already been occurring for years and with the last financial crisis far from forgotten, and more turbulent times likely ahead with Brexit, the prospect of access to cash will remain highly attractive to many. Steps continue to combat such scams and to educate the general public and, I must admit, two positive steps have already taken place this year.
“It’s good to talk”
Firstly, the Single Financial Guidance Body (SFGB) has now taken on its delivery functions. This body is the amalgamation of three well known providers of government-sponsored financial guidance, the Money Advice Service, the Pensions Advisory Service and Pension Wise. Its aim is to deliver free and impartial financial guidance and a more streamlined service to members of the public providing easier access to guidance and information. Funded by existing levies on pension schemes and across the financial services industry, the SFGB will be of paramount importance in the education, and therefore the protection, of the public.
“Don’t speak to strangers”
Secondly, a cold calling ban in relation to pensions came into force January 9th in an attempt to disrupt, according to Citizens Advice, the 10.9 million unsolicited pension calls and messages made to the public each year. This new ban prohibits cold-calling in relation to pensions, except where the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and the recipient of the call consents to calls, or has an existing relationship with the caller. Although firms who breach this ban will face fines of up to £500,000, my personal opinion is that it will still not deter the hard-core scammers already in operation. That said, it is undoubtedly a positive step regardless. This ban says to the public, in the simplest terms, that they should not be receiving cold-calls regarding their pensions, albeit some exemptions apply. The easiest approach is, if you are not expecting a call about your pension hang up. It is a simple message which can and should be easily communicated and understood.
By streamlining the provision of free and impartial guidance to the public and at the same time taking action to deter the activities of pension scammers, positive steps have already been taken only days into the New Year. We must, collectively as an industry, maintain this momentum as we strive to protect the interests of scheme members.