Ministers fear 11million OAPs are targeted by up to 250 cold callers
ROGUE pension firms will be banned from cold calling after vulnerable savers lost £5 million to investment scams this year.
New laws will threaten offenders with fines of up to £500,000 if they tout for custom by phone, email or text message.
Financial giants will also be given sweeping powers to block transfers of large sums if they suspect a client is being ripped off.
Ministers acted amid fears that 11million pensioners are being targeted by up to 250 cold call fraudsters every year.
They are preying on them after reforms introduced by ex-Chancellor George Osborne gave savers freedom to decide how to invest their pension pot.
It led to an avalanche of scams, with Brits being cheated out of £43million in three years – an average of £15,000 each.
A staggering £13.3million worth of pension fraud was reported to City of London police alone in the first six months after the reforms.
Tough action will be included in detailed public consultation to be announced by the government this week.
They were meant to be included in a finance Bill earlier this year – but experts were dismayed when the plans were dropped.
Treasury Minister Stephen Barclay said: “It is utterly unacceptable that people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket.
“Pensions are the most valuable asset a person has upon reaching retirement – and that’s why we are determined to crack down on scammers and protect hard-working savers.”
Under the proposals, all contact where a business has no existing relationship with a customer will be banned. The law will be enforced by the Information Commissioner’s Office.
In a further safeguard, only active companies, which produce regular, up-to-date accounts, will be allowed to register pension schemes.
Cash transfers between schemes will be limited and monitored and in future can only be moved to a firm regulated by the Financial Conduct Authority.
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Pensions Minister Guy Opperman said: “The latest figures highlight the extent to which people’s savings are being targeted or stolen through elaborate hoaxes, leaving them with little opportunity to build up their savings again.
“This is the biggest life saving that individuals normally make over many years of hard work. We want to protect them.”
Pensions reform campaigner Baroness Altmann, who has been pressing for safeguards, said: “I’m delighted to see the government taking the issue more seriously at last.
“These measures will help protect the public and there will be widespread support for them.”