A code on combating pension fraud has been rewritten to reflect the new world of scamming, with an even greater focus on the changes to market, vulnerable customers and fraudsters’ tactics.
Dubbed as ‘Version 2.0’ of ‘Combating Pension Scams - A Code of Good Practice’, the document was republished today (22 June) by the Pension Scams Industry Group (PSIG).
The Pension Scams Industry Group, formerly the Pensions Liberation Industry Group, is a voluntary board made up of representatives from trade and consumer bodies, administrators, trustees, industry bodies, providers, legal and technical experts.
The new-look code sets out the key steps in helping identify possible pension scams, with practical guidance such as sample scam letters and checklists for ensuring the necessary steps are taken.
The original code, first launched in 2015, has helped prevent thousands of unauthorised pension transfers since its launch three years ago, according to Margaret Snowdon, chairperson of the group.
Ms Snowdon said the pension landscape has “changed significantly in recent years” due in part to the growth in international self-invested personal pensions (Sipps) and qualifying registered overseas pension schemes (Qrops).
She said this means a new code was much-needed.
She called Version 2.0 of the code "bold and informative", containing more case studies, template letters and discharges to help schemes safeguard their members.
According to Ms Snowdon, the new code also makes it easier for schemes to report suspected scams to Action Fraud, the UK's national fraud and cyber crime reporting centre, with added case studies portraying real decisions made by real schemes.
Ms Snowdon said: "While we await regulation to help stop cold calls and make it tougher to transfer, the industry needs tools to help pinpoint dubious arrangements.”
Michelle Cracknell, chief executive of The Pensions Advisory Service, said: “The scourge of pension scams continue with the scammers taking advantage of people being disconnected and not fully understanding their pensions.
"The types of scams continually evolve, making it even harder to protect the customers.”
Part of the difficulty is that while the investment scheme being offered may not be illegal, Ms Cracknell said such schemes may be marketed inappropriately to people with little understanding of the risks involved.
Darren Cooke, independent financial planner for West Yorkshire-based Red Circle Financial Planner, said: “Pension schemes are at the coalface of scams.
"Good guidelines and industry practice alongside awareness and training of administrators can help them question a members request to transfer where they have suspicions the money may be moving to a scam."
He said that schemes and administrators working closely together and sharing information on suspicious activity and suspicious firms or pension arrangements could only help the whole industry reduce the number of people being scammed.
Mr Cooke said: "It is encouraging to see PSIG enhancing and updating its guidelines to continue to promote awareness and action by schemes to help prevent scams.”