Regulatory action to tackle pension scams

He says it is suspected that the actual amount will be substantially greater as not all cases will have been identified.

The pensions industry has set up a multi-agency campaign group ‘Project Bloom’ to address pension fraud, which is co-ordinated by the Pensions Regulator.

The key focus of the campaign group is to raise awareness of pension scams, not only to try and prevent members transferring to schemes that pay unauthorised payments but also to alert people to the risks of any fraudulent pension schemes or investments.

The new campaign re-launched using the wider term “pensions scams” rather than “pension liberation” because Helen Dreyfuss, pensions technical specialist of The Pensions Advisory Service, says pension fraud is a much wider issue.

The following organisation are part of Project Bloom:

• The Pensions Regulator

• The Pensions Advisory Service

• Financial Conduct Authority

• HMRC

• Money Advice Service

• Action Fraud

• National Fraud Intelligence Bureau

• City of London Police

Many of these agencies have published warning statements or consumer awareness videos relating to pension scams on their websites.

The Pensions Regulator has worked with the Pensions Advisory Service and other agencies, to produce new guides illustrating the threat to people’s pensions if they are taken in by such offers. They are asking trustees and administrators to ensure that members receive regular and clear information about the risk of pension scams.

Pension providers should include the warning insert in any information sent to members who request transfer details, but they are also suggesting the information is sent out with annual pension statements and other member communications.

Ms Dreyfuss says: “The more members know about the risk of pension scams, the less likely they are to fall for them.

“The new guides are available to download from the Pensions Regulator and the Pensions Advisory Service websites.

“The leaflet aimed at pension professionals provides a checklist, which is aimed at helping identify when individuals have been approached by fraudsters.”

The Budget also included plans for legislation to restrict pension liberators and it also included plans to make liberation less attractive.

HM Revenue & Customs has also set up a service to allow transferring schemes to check if receiving schemes are registered, says David Trenner, technical director of Intelligent Pensions.

HM Revenue & Customs is tightening their rules for the registration of new schemes, with some success.

In the six months up to October 2013 it received 11,184 applications to establish new schemes. Between October and April this year it had only received 4,530 applications, and 8 per cent of these were rejected.

Ultimately, however, despite the actions of the various regulators Mr Trenner says consumers have to take responsibility for their own actions.

He says: “If it seems too good to be true, it will be too good to be true.”

James Walsh, policy lead for EU and international at the National Association of Pension Funds, agrees.

He says: “Never be rushed into making a decision. A lifetime’s savings can be lost in a moment.”