Claims management companies are trying to find loopholes in pension schemes' scam communications in order to bring a claim, a prominent industry figure has warned.
Margaret Snowdon, chairwoman of the Pension Scams Industry Group, told FTAdviser that ambulance chasers were trying to mimic the Northumbria Police case, a recent Ombudsman case in this area.
She said CMCs were contacting scheme administrators, and sometimes trustees, asking for information about specific members that left the scheme and were scammed before 2013, as they are looking for a loophole for compensation.
In the Pensions Ombudsman case a former police officer got his pension benefits reinstated because the scheme's trustees did not conduct adequate checks to prevent fraud.
The claimant, Mr N, transferred benefits worth more than £112,000 to London Quantum in 2014, an occupational scheme created two years earlier.
The transfer was done after Mr N saw an unregulated introducer, but the officer claimed he did not realise it had involved a high-risk investment and him being classed as a sophisticated investor.
The money was feared lost after the scheme's sponsoring employer, Quantum Investment Management Solutions, went into liquidation.
Ombudsman Anthony Arter ruled the Northumbria Police Authority had failed to conduct adequate checks and enquiries in relation to Mr N’s receiving pension scheme.
It had also failed to send him The Pensions Regulator's transfer fraud warning leaflet, and to engage directly with Mr N regarding the concerns it should have had with his transfer request, had it properly assessed it.
The watchdog started issuing this action pack, also known as Scorpion warning, in 2013.
Ms Snowdon explained that this campaign asked trustees to conduct a series of due diligence checks in pension transfer requests to make sure that the member wasn’t being scammed.
She said: “If trustees haven't done that, then they could be vulnerable to a claim. The Northumbria case was quite unique because they didn't send the Scorpion leaflet.
“Lots of other schemes could possibly have done the same, and didn't get around to send the leaflet or to do any due diligence.”
Ms Snowdon noted that these pension funds could be somewhat exposed to CMCs. However, the chances of a member being reinstated in the scheme are probably quite small, as every case needs to be tested.
“It's just worrying that these companies have spotted an opportunity,” she added.
maria.espadinha@ft.com
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