Greg Wright: Our regulatory system is floundering in the villains’ wake

Companies making nuisance calls about pensions now face potential fines of up to half a million pounds  Photo: Joe Giddens/PA Wire
Companies making nuisance calls about pensions now face potential fines of up to half a million pounds Photo: Joe Giddens/PA Wire
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When it comes to regulatory reform, the Government is always standing on the dock, wistfully watching a ship that has sailed.

The Treasury does not deserve plaudits for its belated action to stop pension scammers who are condemning people to an impoverished retirement.

It should have used an iron fist to thwart these nuisance callers years ago. The Government’s in tray was groaning under the weight of repeated warnings from commentators and industry groups about the behaviour of organised gangs who are preying on thousands of vulnerable people.

Amid much fanfare, the Government has announced that companies making nuisance calls about pensions now face potential fines of up to half a million pounds. Firms making unsolicited phone calls to people about their pensions may now face enforcement action.

Research from the Money Advice Service (MAS) suggests there have been as many as eight scam calls taking place every second - or 250 million calls per year.

The need for tougher sanctions is long overdue. Pension scammers stole an average of £91,000 per victim last year, according to the Financial Conduct Authority.

There were some appropriately stern words from John Glen, Economic Secretary to the Treasury, as he announced the new sanctions.

He said: “Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives.

“We know that cold calling is the pension scammers’ main tactic, which is why we’ve made them illegal.

“If you receive an unwanted call from an unknown caller about your pension, get as much information you can and report it to the Information Commissioner’s Office.

“I’d also urge all savers to seek independent advice if you’re thinking about making an important financial decision.”

These are fine sentiments and sound advice. But it beggars belief that it has taken the Government so long to get round to imposing this ban.

As long ago as 2016, Martin Lewis, the respected commentator - and regular contributor to The Yorkshire Post - backed a petition which stated a ban “would dramatically reduce the number of people falling prey to fraudsters and losing their savings and pensions”.

It has taken the Government almost three years to attempt to protect people whose life savings are being stolen. This foot-dragging is hard to explain.

The Government should have been deafened by the alarm bells, which started sounding before the vote in favour of Brexit.

Between 2016 and 2017, the RSM Pensions Fraud Risk report found evidence of a threefold increase in pension scams.

The problem grew worse after new pension freedoms were introduced in April 2015. In the year before their introduction, the amount lost to fraud stood at £5.4m. In the year after they came in, that amount soared by nearly 150 per cent to £13.3m, according to City of London Police. However, these calculations do not include money moved out of a pension scheme into an investment vehicle, meaning the total amount is likely to have been higher.

And what was the Goverment’s dynamic response to this overwhelming evidence of misconduct? They held a consultation process into proposals to ban pension cold calling, which closed in February 2017. Almost two years later, they have finally implemented this ban. It’s another case of too little, too late.

How many victims suffered while the Government scratched its head before deciding on a course of action which was, to almost quote the great philosopher Basil Fawlty. blindingly obvious?

While the clock ticked, the crooks devised more sophisticated ways of wrecking retirement dreams. It’s a familiar, sad story. Small business owners whose lives have been wrecked by banking misconduct will feel a powerful affinity with the victims of pension scamming. They have also been betrayed by a regulatory system that seems to be constantly floundering in the villains’ wake.