UK regulators join forces to tackle pensions fraud
The UK’s financial services and pensions watchdogs have launched a nationwide campaign aiming to raise awareness of pension fraud.
According to a poll of 1,018 adults with pension savings that was conducted on behalf of the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), fraudsters steal an average £91,000 (€102,000) per victim by persuading people to transfer their money into unregulated investments.
Almost a third (32%) of people aged 45-65 – the age group deemed most at risk of pension scams – “would not know how to check whether they are speaking with a legitimate pensions adviser or provider”, the regulators said in a statement released this morning.
Mark Steward, the FCA’s executive director of enforcement and market oversight, said: “The size of individual pension pots makes pensions savings an attractive target for fraudsters. That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.”
The ScamSmart campaign is designed to draw attention to the main ways fraudsters attempt to attract savers, and includes TV, radio and social media adverts.
The campaign has government backing, with pensions and financial inclusion minister Guy Opperman stating: “Pension scams are devastating for hardworking people and can rob them of the retirement they planned. I would urge savers to always exercise caution and seek independent guidance or advice before making important financial decisions.”
However, James Walsh, policy lead for engagement, EU and regulation at the Pension and Lifetime Savings Association (PLSA), warned that the industry “must remain vigilant” as perpetrators of pension scams were “very quick to adapt their methods”.
He reiterated the pensions trade body’s call for an authorisation regime for all pension schemes to “give people confidence that their pension scheme is a legitimate home for their retirement savings”.
Others warned that the UK’s pension freedoms policy – which has granted retirees easier access to their savings since its introduction in 2014 – had opened the door to increased levels of fraud.
Gregg McClymont, director of policy at The People’s Pension and a former Labour party pensions spokesman, said: “Scammers’ eyes lit up when pensions freedoms were introduced. Four years later, government still has not acted to minimise the harm.
“This campaign is a positive step towards fighting against fraudsters, but a pensions cold-calling ban is needed to stop more people’s pensions being plundered.”
The UK’s treasury department is currently consulting on draft regulations to ban cold calling related to pensions. The consultation period closes on Friday.
The FCA and TPR are part of a wider project, dubbed Project Bloom, aimed at combating pension-related fraud. It includes the UK government’s treasury and work and pensions departments, as well as the country’s Serious Fraud Office, the City of London Police, the National Fraud Intelligence Bureau, the Pensions Advisory Service, and the National Crime Agency.