The Pension Scams Industry Group (PSIG) has updated its voluntary code of practice to include regulatory changes and emerging scams which have impacted the industry over the past year.
The PSIG, the voluntary body set up to support trustees, providers and administrators in combating pension scams, has today (June 10) published version 2.1 of Combating Pension Scams – A Code of Good Practice.
There have been 10 key changes to the document, updating the June 2018 version.
These include the introduction of the cold-calling ban in January, inclusion of the new Money and Pensions Service which launched in April, and the Financial Conduct Authority’s (FCA) Dear CEO letter on managing the risks of defined benefit to defined contribution transfers which was published in March.
The updated code also warns about the rise of claims management companies (CMCs) and the impact they are having on the industry.
CMCs operate by getting pension scheme members to sign letters of authority so that the CMC can act on their behalf when going against the transferring schemes to allege they did not conduct adequate checks before allowing transfers-out, the code states.
The PSIG also warned that CMCs may get members to make so-called Data Subject Access Requests under the General Data Protection Regulation (GDPR) to obtain information which they are not entitled to.
FTAdviser last month reported that CMCs were targeting self-invested personal pension providers who had taken on British Steel workers' pensions after they were advised to transfer out of their schemes.
It is unclear how the CMCs got hold of the client lists but one CMC was found to have approached Intelligent Money with a subject access request without the clients' knowledge, while the other cold-called a British Steel worker and turned up on their doorstep within 24 hours of the call.
The code states: "Many of these claims are clearly speculative and, in those circumstances, schemes are encouraged to respond ‘robustly’ to them stating, so far as relevant that:
- in connection with any transfer, the [transferring scheme] has always followed prevailing legislation, its trust deed and rules and guidance from the Pensions Regulator; and
- if a member or former member has a complaint or dispute then, in the first instance, the individual member should follow the procedure set out in the scheme’s internal dispute resolution procedure."
Margaret Snowdon OBE, chair of PSIG, said: "We’ve been making good progress in our fight against pension scams, with many £millions saved from the clutches of scammers through our work. But scammers are cunning and will always evolve their techniques, which is why we continue to develop our code.
"It will take the introduction of legislation to truly end the growing problem of pension scams but in the meantime, our voluntary code provides essential guidance and tools to help trustees and providers identify, and protect, their members and themselves from suspicious activity."
The first version of the code was introduced in 2015 and set out what companies, schemes and advisers should do to protect individuals from scams.
Minister for Pensions and Financial Inclusion Guy Opperman called pension scams "callous crimes" which "rob people" who have saved for their future and retirement.
He added: "There’s good work already going on - the FCA’s scams smart campaign stopped £33m falling into crooks’ hands last year alone.