Pension Liberation Firm Rapped For Phone Texts

Pension Liberation Firm Rapped For Phone Texts

A firm which sent out unsolicited text messages has been banned from targeting people offering to help unlock cash from their pension before they retire.

Clarity Leads was censured by the Advertising Standards Authority (ASA) for breaching advertising codes because the text messages did not make clear who the sender was.

The ASA investigated two complaints involving Clarity Leads – one for the unsolicited text and the second for not identifying themselves properly; both allegations were upheld.

One of their text message promised recipients they could release a large cash sum and achieve high growth yield if they transferred their money to a pension liberation scheme.

The Leeds-based firm denied they were responsible as they were sending the messages on behalf of a client.

Pension unlocking

Pension liberation is the controversial practice of letting retirement savers cash in part, or all, of their pension pot before the normal early retirement age of 55.

Savers can only do so under strict rules and those who break them face hefty charges from HM Revenue and Customs – as do the firms liberating the pension charges huge amounts to do so.

The ASA has informed Clarity Leads that: “In future, the firm must have the consumer’s explicit consent before the sending text messages.”

The firm must also tell potential customers who they are when sending future texts.

There are a growing number of firms offering to liberate pensions. The industry regulator is currently investigating 21 companies.

Around £400 million was ‘liberated’ last year and the figure is expected to have rocketed since then.

Advisers target bankrupts

The firms targeting potential clients are scouring bankruptcy lists and last year one firm aimed their activities at local government pension scheme members, telling them that their pension was in trouble and was unlikely to pay enough in retirement.

Delegates at a recent forum heard from The Pensions Regulator (TPR) last year that financial advisers are targeting people who are struggling financially or had recently lost their job.

There is no particular age group or scheme type that is at risk from the attentions of a pension liberating firm, the regulator said.

Team leader Victoria Holmes told the conference that pension fund trustees had an important role to play in spotting the schemes and preventing transfers into a scheme they believe is suspicious.

Among the key triggers is for a pension firm to suddenly receive lots of applications and for members to pressure the pension provider to transfer their savings pot quickly.

She told delegates that once a fund has been transferred, retrieving a member’s cash is almost impossible.

She also pointed to an increasing sophistication of the firms in their targeting of potential clients which, in addition to the text messaging, also includes cold calling.