Organised crime groups led by married couples or families are running pension scams worth millions of pounds.
Intelligence gathered by members of the multi-agency Project Bloom group, which was set up to tackle pension scams, indicates that a number of “fraudster families” are targeting pension holders.
Criminal investigations involving regulators, government agencies and police forces are currently ongoing into a number of these gangs. In addition, a number of individuals linked to the scams have been suspended or banned from being trustees and companies used for scams have been shut down.
In some cases the families have hired rogue financial experts with specialist pension knowledge, including accountants, advisers and trustees, to run the large-scale scams for them. Without these professional enablers the frauds would not be successful.
Victims of pension scams lost an average of £91,000 each to fraudsters in 2017 but some people have lost much more.
They reported receiving cold-calls, offers of free pension reviews and promises that they would get high rates of return – all of which are key warning signs of scams.
A ban on pension cold calling came into force earlier this month. Firms that break the rules could face penalties of up to half a million pounds.
The partners in Bloom met last month to discuss the scams problem and how the partners could work even closer together to target those responsible.
Representatives of the Pensions Scams Industry Group (PSIG) also reported that pension providers are identifying more suspicious transfer requests than ever before and alerting members to what they believe could be scams. This follows the voluntary body issuing a new code of good practice to trustees, providers and administrators in 2018 that features guidance on carrying out due diligence well.
Nicola Parish, The Pensions Regulator’s (TPR) Executive Director of Frontline Regulation, said:
“Trustees and administrators play a key role in preventing members from falling victim to scams by identifying suspicious requests early.
“The better they are at spotting the signs of a scam, the quicker members can be warned and we can investigate.
“Working together we can target those trying to plunder people’s pension pots and bring them to justice.”
Guy Opperman, Minister for Pensions and Financial Inclusion, said:
“Scammers who siphon off savings built up over decades are the lowest of the low. When you’ve worked hard and done the right thing, you don’t expect a con artist to rob you of the future you deserve.
“We’re determined to put a stop to the misery these callous crooks inflict, which is why we’re supporting the work being done to stamp out pension theft.”
Margaret Snowdon, the chair of PSIG, said:
“The closer we work together, the more difficult it is for scammers to steal people’s pensions.
“We will continue to do everything we can to spot possible scams early so we can help consumers to avoid becoming victims.”
Visit ScamSmart to understand the signs of a scam if you are considering transferring your pension. If you think you have been a victim of a pension scam, report it to Action Fraud online or by calling 0300 12302040.
- TPR has a number of ongoing criminal investigations into pension fraud where family relationships are at the heart of the case. Family ties are a common theme, with relatives often gaining financially from the criminal behaviour. As these cases are ongoing, we cannot provide further details at this stage other than to say we have evidence of criminal behaviour worth tens of millions of pounds involving siblings, married couples, and parents and their adult children.
- Project Bloom was created in 2012 and brings together government departments, agencies, regulators, law enforcement bodies and representatives of the pension industry to tackle pension scams. The partners are TPR, the FCA, the Department for Work and Pensions, HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, Action Fraud, TPAS, the Pensions Scams Industry Group, the Money Advice Service, the Information Commissioner’s Office, the Insolvency Service, Pension Wise, National Trading Standards and the National Crime Agency.
- PSIG, a cross-industry initiative, was set up to combat pension scams. It published its first code in 2015, setting out the key steps to help identify possible pension scams, as well as providing practical guidance like checklists and sample letters. Whilst the code has no statutory basis, schemes have been adopting its guidelines in the three years since its launch, resulting in the prevention of thousands of transfers to unauthorised arrangements and saving many people from a likely loss of pension savings. It launched its updated code in June 2018.
- The number of people seeking information about pension scams has soared since the launch of the first joint campaign by the FCA and TPR last summer. In the 55 days before the launch around 31,000 people visited the ScamSmart website at an average of 562 per day. In the 55 days after the launch this rose five-fold (462%) to more than 173,000 people – an average of 3,145 per day and the equivalent of one every 27 seconds. Additionally, over 370 pension holders were warned about an unauthorised firm after using the Warning List, an online tool that helps consumers check a list of firms operating without authorisation.
- Four simple steps to protect yourself from pension scams are:
1. Reject unexpected pension offers whether made online, on social media or over the phone.
2. Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA.
3. Don’t be rushed or pressured into making any decision about your pension.
4. Consider getting impartial information and guidance from TPAS on 0800 011 3797.