Pension freedoms: How to deal with cold calls from scammers

Sean O'Grady offers advice on keeping your money safe

Put the phone down on the cold-callers who see pension liberation as an opportunity to liberate your pension from you (Corbis)

Well, it's happened again. Another cold call about my pension – this one with a few novel touches I'd like to share with you. When it comes to snuffling out the wealthy and gullible, there seems no end to the ingenuity of parts of our financial services "industry".

It started with the usual pleasantries. The name of the company was the usual mix of plausibility and a vaguely-familiar sounding expression (there is another firm, apparently unconnected, called the same, but without a hyphen. Certainly a confusing state of affairs for either firm's customers I'd have thought).

Anyway there was the ritual assurance that they were only calling out of concern for my own well-being. Did I realise, the nice man asked, that I could be losing hundreds, maybe thousands of pounds, because "management fees" on pensions could be as high as 2 per cent, maybe more.

Therefore, after the usual offer of a review, I could save a lot of money by moving to a lower management charge regime. This was interesting, because it strikes a chord with the widespread belief that "charges are too high". So it is quite a good bit of bait to lay before would-be customers.

But there are many different types of charges, and what you might gain on some, you'd lose on others. I have paid higher charges for the services of a truly professional outfit, and the returns have been stonkingly good, and well worth shelling out for.

Of course, there is no necessary correlation between the two but, like everything, there are two sides to the charges story. At least two sides, in fact. The cold callers don't tell you that; but I made sure I told the cold caller about the possibility that higher charges were not always wrong.

Next we moved on to how long his company had been operating for – "five years" – and its credentials. It was then that, referring to the website, I discovered that it wasn't registered with the Financial Conduct Authority.

This was, it seems, because they were not offering advice as such; but also because they were operating on behalf of a "collective" of financial advisers, whose logos proudly appear on the website. These were also all firms I have never heard of, and plastering a large number of logos on a website does not impress me.

The cold callers now all set up websites to make themselves look respectable; not so very long ago you could easily trip them up by trying to get a web address from them, and being greeted with some comical attempts at evasion. They are evolving and becoming more sophisticated.

Then came the point of the call; me. How much was I worth, was the basic query. I naturally parried this, and answered with the first number that came into my head, or, more accurately, that I saw on my computer screen – £1,623, that being firmly based on the time display of 16:23.

The revelation that I was such small fry led to a marked deterioration in the conversation and the suggestion that they might be able to save me enough money "for a holiday at Butlin's". And then the phone went dead. How rude of them to hang up!

One day, maybe, when I am older and even more befuddled I will perhaps fall prey to these sorts of calls, and find myself worse off, to put it mildly. Listening to Radio 4's excellent Money Box the other day, I was startled to hear an Australian commentator describe how they had been through this whole deregulation palaver and how many people had lost money at a time in their lives when they could do nothing about it.

As I have written many times, these welcome pensions reforms risk being the next great mis-selling scandal waiting to happen. If my experience is anything to go by, just a few days into the new freedoms, the calamity is already upon us, though the full effects will take many years to work through.

There's a general election on, and the subject of pension freedoms concerns the second biggest financial asset people have, after their home. Never mind Trident: what are the parties proposing to do to protect pensioners and prospective pensioners? Please? Anyone?

Famous five: the most common scams

Convincing victims to move their pension pots into fraudulent schemes, and pretending to be their employer or pension provider are among the tactics used by scammers, according to Citizens Advice.

The charity has identified five common types of scam: moving savings into a new "pension"; fake investment opportunities; offering free "advice" and support; charging a fee for a dodgy service; and getting personal information from people.

Gillian Guy, chief executive of Citizens Advice, said: "Scammers see pensioners as a prime target. There are many people looking to benefit from the new pension rules, including scammers. Fraudsters can take a portion or all of a victim's pension pots.

"Anyone who feels unsure about a cold call or dodgy offer they have received about their pension should report it to the authorities."