Consumers need to be completely protected from “pension cowboys”, the Association for British Insurers has said.

Responding to the Treasury’s recent consultation on pension scams, the ABI has stated that while it supports the government’s proposals regarding a ban on cold calling, it could be taken one step further.

The government should ban 'cowboy' firms that contact consumers via all forms of digital communication including email and text, to ensure people are fully protected.

The ABI also highlighted the importance of making consumers aware that cold calls on pensions will be illegal and to report them accordingly.

ABI director of long-term savings and protection policy Yvonne Braun said: “The ban on cold calling announced in the Autumn Statement is a good first step but the government needs to ensure consumers are fully protected from the pension cowboys – they should not be allowed anywhere near people’s life savings.

"Banning cold-calling and other measures in the consultation should help, but we need to make sure cold calls aren't just replaced by a deluge of spam emails and texts. That’s why we think further measures to stop fraudsters from using other forms of technology need to be considered by the government.”

The Pensions and Lifetime Savings Association also supported this view and has noted that while it supports the government’s proposal on cold calling, it believes that all forms or digital messaging should be included.

Furthermore, the PLSA has proposed that the government introduces an authorisation regime, initially focusing on new or existing schemes with fewer than 100 members, as the regulation for these is not fully effective in preventing pension schemes being used as vehicles for scams.

Smaller or new schemes that seek to accept transfers should be legally required to appoint an independent professional trustee with the responsibility to “blow the whistle if they suspect a scam”, the PLSA suggested.

An alternative option could be for small schemes to have a recognised professional, such as a lawyer, accountant or actuary as their independent trustees to spot potential scams, the association said.

PLSA director of external affairs Graham Vidler, said: “We welcome the government’s commitment to tackle the issue but a much more ambitious approach is needed.

“A completely new authorisation regime for pension schemes will offer savers robust protection from scammers who have been able to set up pension scam vehicles too easily in the past. The nature of the regime will depend on the risks presented, but we should start by introducing authorisation for the schemes with the greatest risks, such as smaller schemes and SSASs.”

Share Story: