To take out scammers, the UK government has announced that texts and emails will be included in a ban on companies who cold-call retirees to sell pensions.
The initiative comes after nearly £5 million was stolen by con-artists in the first five months of 2017—bringing the total to an estimated £43 million since April 2014. The scams have affected nearly 3,000 savers, who lost an average of £15,000 each.
The deception is usually initiated when low-risk investments with promises of high returns are offered to retirees. The catch, of course, is that these investments must come from the transfer of pension accounts into the fake schemes.
Some cold calls, such as mortgage-related calls, are already banned. The law will be changed to include pension-based cold calls, texts, and email solicitations. Companies who haven’t been granted permission to contact consumers—or lack an existing client relationship with buyers—will face fines up to £500,000.
The government will also add restrictions to make it more difficult for money to be transferred into unregulated pension schemes.
“If people have saved for a private pension, we want to protect them,” Guy Opperman, Minister for Pensions and Financial Inclusion said in a statement. “This is the biggest lifesaving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
In April 2015, new pension freedoms were enacted in the UK, allowing anyone over age 55 to withdraw money from their pensions, and spend or invest savings however they saw fit. Experts warned that this could have disastrous consequences on retirees.
A spokesman for the Department of Work and Pensions (DWP) told BBC News that the legislation would happen “when parliamentary time allows,” which means that it could take some time before any changes are made official.