According to the UK regulator’s business plan published on Tuesday, the organisation says that reforms introduced in April last year giving people unrestricted access to their pension savings have “created a new market for scammers” with people at greater risk of being targeted by fraudsters.
The FCA plans to tackle this by upping the momentum of its ScamSmart crime prevention campaign – launched last year and aimed at educating consumers at or near retirement – by investing in advertising and providing more information on its website.
The campaign, which received 200,000 enquiries last year, encourages consumers to reject cold calls, check the regulator’s warning list before investing and to get advice.
The FCA says it will take action against scammers, warning that the most serious cases will face criminal prosecution.
Tracy McDermott, interim chief executive of the FCA, says: “On financial crime, we will continue to actively protect consumers and markets from the criminals who seek to exploit them. We will take tough action against wrongdoers, working closely with industry and law enforcement to do so. We will also take steps to help people to protect themselves against crime through our ScamSmart campaign.”
However, the authority was keen to point out that “only a limited number of scams will fall within our remit” – stressing that its main focus is on raising awareness to help consumers to actively avoid scams.
Early exit charges cap
Meanwhile, the FCA has also laid out plans to cap early exit fees on pensions after a Treasury consultation in February concluded that these charges often prevent people from being able to access their savings.
It has been estimated that around 3,700 customers aged 55 or over in older-style pension are currently subject to exit fees – usually on contracts taken out more than 17 years ago when the upfront costs were spread across the term of the plan.
The regulator says that pension products with high costs or uncapped fees can “disproportionately reduce fund values, with a significant cumulative impact on consumer’s funds”.
Last week, Old Mutual Wealth announced that it is reducing its exit fees on traditional UK pension contracts, putting a 5% cap in place for all customers aged 55 or older.
Steven Levin, chief executive of OMW’s investment platform, said the cap is being introduced to “ensure customers receive good value for money”.