The Ministry of Justice (MoJ) will be looking into accusations that claim management companies (CMCs) are cross-selling clients' personal details to pension scammers.
Michelle Cracknell, chief executive of The Pensions Advisory Service (TPAS), revealed at FTAdviser’s Unpackaging Pensions event that the organisation has received several calls from people that had previously been in contact with someone from a payment protection insurance (PPI) firm, and are now being cold called by pension scammers.
She said: “We have a number of those examples where this cross-selling situation is happening.”
The Ministry of Justice regulates claims management companies.
Kevin Russel, head of claims management regulation unit at the MoJ, told FTAdviser that he will be “contacting TPAS to initiate a discussion with them on the matters raised by Michelle [Cracknell] at the conference”.
Mr Russel said: “I am not aware of there being a particular issue at this time regarding CMCs acting illegally in relation to data handling and pensions matters.
“However, we continue to monitor the market and work with other agencies as necessary to inform our intelligence gathering and related work.
“Where regulated CMCs act in way which breaches the current regulatory requirements, we deal with it and will investigate and sanction as appropriate.”
Ms Cracknell said that “it is excellent” that the MoJ is available to discuss this matter.
She said: “We have talked to lots of people, I haven't spoke to the Ministry of Justice yet, so it is great that he [Mr. Russel] is reaching out to me.
“We need to raise customer awareness - scammers are going to keep finding ways to lure people out of their pension money. The more we can do, the better it will be.”
Simon Evans, chief executive of Alliance of Claims Companies – a trade body representing around 60 financial CMCs – agrees with the MoJ decision.
He said: “It was the first time I've heard of it, it is not something I have come across in any sense before.
“But if this is something that is happening, it needs to be looked at and addressed.”
According to Mr Evans, there are a rigorous set of rules in place to stop abuse happening with consumer data.
“I hope they are working well,” he added.
For Malcolm Mclean, senior consultant Barnett Waddingham, the activities of many of some claims firms “leave a lot to be desired, particularly in the aggressive ways they attempt to sell their services in relation to PPI claims”.
However, “it is one thing to be sailing close to the wind in their marketing techniques and quite another in effectively colluding with pension scammers in robbing innocent people of their hard-earned savings,” he said.
"If the cross-selling of these companies’ books is happening and it not illegal, “then it should be made so, and proceedings taken against them wherever possible,” he added.
Darren Cooke, chartered financial planner at West Yorkshire-based Red Circle Financial Planning, is shocked that the MoJ has no knowledge of this situation.
He said: “Everybody else knows. I honestly can't believe they sit there and they say they didn't know.”
According to Mr Cooke, it is common knowledge that this is the current situation, with some people being scammed more than one time.
He said: “Once you have been scammed once, you are likely to be scammed again, because your name is on the list, you're vulnerable and susceptible.
“You have been scammed once, but then this company comes along and says we might be able to get your money back, will you give me £1,000? So, you give them that money, trying to chase the money you've lost. But they're probably a scammer as well.”
maria.espadinha@ft.com
