Tpas reports spike in 'double pension scams'

Tpas chief executive Michelle Cracknell dubbed such cases "double scams", telling FTAdviser the government-funded financial guidance provider had seen a clear increase in this type of activity in recent months.

"Pension scams have been around for years. Unfortunately, they continue with scammers coming up with new techniques," Ms Cracknell said.

"As customers discover that they have been scammed, they become desperate to resolve their situation. This can lead to the double scam."

As customers discover that they have been scammed, they become desperate to resolve their situation. This can lead to the double scam.Michelle Cracknell

She said customers were usually approached by "claims management firms," which appeared to have knowledge of the company that carried out the scam, and offered a claims service for a fee of 25 per cent.

Tpas provided FTAdviser with a number of emails from scam victims, with the personal information taken out.

One email read: "I have issues regarding investments in alternative investments, the issue is that 'X' has gone bust so a massive part of my pension is now tied up and I am unable to call back my investments from the others." 

The victim then employed a "company" to help them, signing paperwork that allowed the company to act on their behalf.

"However this company seems to have disappeared and the numbers and website address I have do not work apart from one that goes to a voicemail. I believe I have been scammed, do you know of any one I can talk to try and sort this out[?]" the email read.

Another was from someone who took their money out of a pension scheme because they believed the scheme was withholding benefits.

"I have been approached by 'Z' who wish to investigate if there is any money left in the scheme which was taken out before the payment was made to me," the email read.

"I subsequently put the money into a Barclays fund which was taken out when I was 65. Is this a scam or if there is money due to me can I access it without paying them a fee[?]"

A third email appeared to show two pension companies colluding with on another - the first, "X", apparently going bust, and the second, "Y", informing the customer that they were taking over as trustee of their pension, and requesting all of their information.

"I would like to know have 'X' ceased trading and should I not have received any info in writing, is 'Y' a genuine company, is it a scam or is my pension now worthless. I have emailed 'Y' but received no reply," the email read. 

Darren Cooke, a financial adviser with Red Circle Financial Planning, launched a parliamentary petition in September to ban cold-calling for pensions and investments.

By Monday (14 November) afternoon it had gathered almost 7,600 signatures.

He agreed that double scams were a growing problem.

"It is a well-known psychological fact that people who have been scammed once are likelier to be scammed again. Scammers will sell their details on to other scammers," he said.

He said victims of scams tend to get into a casino mentality, where they will look for high-return investments in an attempt to recoup their losses, leaving them vulnerable to scammers.

"I think scammers are becoming cleverer and more sophisticated. There is big money in this," he said.

He cited one scheme, accessed through Qrops, that had raised £20m in an investment vehicle that bet on football matches.

Mr Cooke's petition received a major boost last week when a number of major product providers, including Royal London, Aegon, Old Mutual Wealth and Zurich, pledged their support.

Early in November, the government signalled it was planning an announcement on cold calling at the end of the month.

The Financial Conduct Authority declined to comment on the claim that double scams were on the increase, pointing instead to existing guidance on boiler-room scams and scams by unauthorised firms. 

james.fernyhough@ft.com