Quilter is supporting the Pensions Regulator’s campaign to tackle pension scams by pledging to adopt the stringent standards required to reduce the risk of members falling victim to scammers.
Action Fraud has reported that over GBP30 million has been lost to pension scams since 2017, but the true figure is likely to be much higher given many victims will be unaware they have been scammed, or may be reluctant to report the scam to the authorities.
The campaign, launched by TPR and supported by the Pension Scams Industry Group (PSIG), encourages pension providers, trustees and administrators to protect pension savers by ensuring that pension schemes regularly warn members of the risk of scams; adopt best practice for pension transfers and undertake appropriate due diligence measures to identify potentially suspicious transfer requests.
The government has legislated, through the Pension Schemes Act, to give trustees more powers to restrict fraudulent pension transfers from taking place when certain red flags are raised. However, this alone will not eradicate pension scams, nor will it prevent the proliferation of online investment scams, which pension savers are also vulnerable to.
Quilter therefore believes the government must do more to tackle pension and investment scams, and has called on it to introduce a legal duty for search engines and social media platforms to prevent scam advertisements from appearing online. This can be achieved through the forthcoming Online Harms Bill, or alternatively through the DCMS’s Online Advertising Programme.
Criminals will, however, always seek to circumvent the law, so the government must also look to enforce much stricter criminal penalties on the prepetrators of pension and investment scams. Without tough criminal penalties, there is very little to deter a scammer seeking to defraud people.
Jon Greer, head of retirement policy at Quilter, says: “Pension scams can have a life-changing impact on victims’ financial and emotional wellbeing, so it is vital that pension scheme trustees and administrators do all they can to ensure that members are regularly warned of the risks of pension scams, and to ensure that suspicious transfer requests are identified and investigated.
“The Pension Schemes Act, granting trustees vital new powers to restrict suspicious pension transfer requests, is an important milestone. But we firmly believe the government must tackle the risk of pension scams being facilitated through search engines and social media platforms.
“The government missed an opportunity to address the problem in their recent response to the Online Harms white paper, and we will have to wait even longer for hope that they will introduce a legally enforceable framework for tackling fraudulent online adverts through the Online Advertising Programme.
“But there is also simply no jeopardy for the scammers who are stealing people’s savings, which are often equivalent to the value of someone’s house. It is virtually risk-free for pension and investment scams, so the government need to get properly tough on this appalling crime.
“Furthermore, it would seem entirely perverse that victims of pension scams can also be subject to punitive tax charges; by virtue of tax legislation HMRC are duty bound to collect them. Effectively there is a tax on pension scam victims.”