Spam texts warning ahead of pension changesText savvy scammers could take advantage of reforms
21 March 2015
Consumers are being warned they could find themselves bombarded with a fresh wave of spam texts and calls about the new pension freedoms.
From 6 April 2015 people aged 55 and over will have more freedom over how they access their pension pot.
But fears are rising that the new rules could prompt a spate of scammers seeking to get their hands on people's retirement cash.
Stay ahead of the scammers with our guide to spotting and avoiding pension scams.
Pension review texts
The ICO has warned a Swansea-based financial services call centre to stop sending spam texts that ask people if they want a pension review. An enforcement notice was issued after 659 complaints were made.
The ICO found nearly 190,000 texts were sent by the company over nine months covering subjects such as PPI, payday loans, pension reviews and debt management.
The unsolicited marketing text said: ‘As you have over 10k in your pension, your pension has lost £3219.43 over the last few years. To get it back & find out your payout reply REVIEW.’
The new PPI
The Information Commissioner's Office (ICO) has warned that unsolicited text messages about pension reforms could be akin to unwanted Payment Protection Insurance (PPI) calls and texts.
It is a breach of the privacy and electronic communications regulations to send text messages to people for marketing purposes without their prior consent.
Anyone who receives an unsolicited message should avoid replying and report it. All mobile networks now use 7726 as the short code to report spam texts, which is free of charge.
You should only get a pension review from an Independent Financial Advisor registered with the Financial Conduct Authority (FCA).
The government's reforms mean that instead of being forced to buy a retirement annuity with their pot, older people will be able to take money out in one go or in a series of slices.
The FCA has already said that it is alert to the possibility of scams as the first tranche of pension savers look to take up the freedoms.
Retirement savers and pension scheme trustees should be alert to the risks of people being targeted by cold calls and texts promising a ‘free pension review’ or mentioning a ‘legal loophole’.
Scammers may attempt to flatter, tempt and pressure people into transferring their pension fund into an investment with attractive and often unrealistic returns.
Always be suspicious if anyone calls out of the blue to offer a money-making deal.
Pensions Minister Steve Webb has urged people to ‘put the phone down’ on cold callers offering a free pensions review.