RegulationOct 30 2020

Regulators in the WPC's sights over scams

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Regulators in the WPC's sights over scams
Picture: Skitterphoto via Pexels

Pension scams and the regulatory environment in which they have been allowed to thrive are a key focus for the Work and Pensions Committee, the chairman has said.

In an exclusive interview with Financial Adviser, Stephen Timms, chairman of the WPC, warned the committee will "no doubt" have something to say about the Financial Conduct Authority and The Pensions Regulator's actions (or lack of them) when it comes to preventing scams.

He told deputy features editor Ima Jackson-Obot he is reserving judgement on how the regulators have performed after the first stage of the WPC's inquiry on the impact of pensions freedoms five years on.

However, he added: "I have no doubt once we have completed phase one [of our inquiry] on scams, we will have something to say about the way the regulators have been behaving".

Mr Timms added: "There are more scams emerging the whole time, and all the regulators need to be vigilant to protect us."

Since 2017, £30.9m has been reportedly lost to pension scammers, according to complaints filed with Action Fraud.

During the initial stages of the WPC's pension scam inquiry, Tim Fassam, director of government relations and policy at Pimfa, told the committee that regulation had failed in the UK.

In September, when he appeared before a committee hearing on pension scams, Mr Fassam said the current regulatory perimeter excluded too many high-risk products, which was why the industry is seeing more scams.

Mr Fassam told the cross-party committee: “We are seeing things that are technically in the scope of regulation, but that lead to bad consumer outcomes.

“We have seen this with Sipps, where people are being put into high-risk, unregulated investments.

“This is leading to them falling onto the Financial Services Compensation Scheme or leaving consumers without compensation at all. We think this is partly caused by the FCA supervision focusing on larger firms and missing the smaller firms.”