Calling for a more robust approach to tackling pensions fraud, Stephen Timms, chairman of the work and pensions select committee, told FTAdviser: "It is becoming clear that the enforcement response, if you do report a scam, is not very convincing.
"I think people just do not have confidence that, if they do make a report [about a scam], that anything helpful is going to happen as a result.
"We really have to gear up effectively to deal with [investment scams]. We are no way ready for it and there is a lot the government needs to do."
His comments were echoed by those of Paul Feeney, chief executive of Quilter and chairman of the Financial Conduct Authority's practitioner panel, who said: "Quilter has pushed hard to get government to do more.
"We are behind [more joined-up enforcement action]. I completely support it and one of the things we can do is get much tougher in this space.
"If the industry and the regulators see websites, for example, where the company is clearly operating outside of its authorisation, and there is potential harm – [the regulators] should bring the darn things down. Shoot first, and ask questions later.
"We live in a judicial society where there is a rule of law but where [companies] act outside of that, we can and need to get tougher."
Tougher action, however, needs a joined-up approach - something Mr Timms said just did not exist at the moment.
While he applauded various efforts to tackle the rising problem of pensions fraud, Mr Timms felt the very fact there were so many different agencies meant the action was not as forceful as it needs to be.
It's theft. We talk about 'white-collar criminals' but they are walking the streets. They've stolen money. Lock them up.Al Rush, principal at Echelon WealthHe said: "We have this situation where there is a curious fragmentation of various bodies. We have Action Fraud, the Financial Conduct Authority, The Pensions Regulator, the Pensions Ombudsman, the Financial Ombudsman Service, Project Bloom, the police – everything is so fragmented.
"And therefore people aren't quite sure who to report to, so coordinating the enforcement and policing resources around this is one of the things that has to happen."
He states the WPC will continue to do more to make sure the industry plays its part, too. "Our inquiry is still under way and we haven't yet formulated our recommendations but I am concerned this fragmentation of the policing response is one of the things we need to tackle."
Mr Timms stressed it was government's duty to lead the charge. He pointed to the upcoming session of the WPC set to put current pensions minister Guy Opperman on the spot this Wednesday (January 27), during which he indicated he would ask Mr Opperman about this issue.
While the first report from the WPC's three-part inquiry: Protecting pension savers – five years on from the pension freedoms, will not be published for the next few months, Mr Timms said time was of the essence with scams as the "scope for scamming" was still vast.
Al Rush, principal of Echelon Wealth, said too many scammers had been getting away with their practices for too long, adding the whole industry needed to call it what it is: "It's theft. We talk about 'white-collar criminals' but they are walking the streets. They've stolen money. Lock them up.
"Enforcement action needs to be tougher. It's not a 'scam' or 'fraud' - it's 'theft'. We need to stop couching it in nicer terms and call it what it is."
Mr Rush, who has been at the forefront of helping many former British Steel Pension Scheme members who have lost millions collectively as a result of misadvised pension transfers, also criticised regulators for being seemingly slow to act on tip-offs and whistleblowing.
He claimed he had put across "80 or 90 notifications to the FCA" in the past few years where he and colleagues had noticed instances of "malpractice" but said he could not see any action has been taken. "I can see some of these advisers still walking around", he claimed.
Responding to Mr Rush's comments, a spokesperson for the FCA said: “Whistleblowing reports and industry tip-offs are a vital source of information for us, helping us to do our job and protect consumers. We assess every single report and use these to take action or to inform our supervisory and enforcement strategies in relation to both sectors and firms.”
In a letter to Nikhil Rathi, the FCA's new chief executive, published January 21, Stephen Kinnock, MP for Aberavon, and Nick Smith, MP for Blaenau Gwent - whose constituents in South Wales were particularly affected by the British Steel debacle - raised concerns that the regulator in its current form was not fit for purpose and called on it to ensure that consumers are better protected.
We assess every single report and use these to take action or to inform our supervisory and enforcement strategies.FCA spokespersonThe MPs, who have been part of the group seeking to help the former British Steel workers, urged the FCA to set up a dedicated consumer arm or taskforce that could better deal with consumer issues as they arise.
According to reports, the FCA has reviewed all of the higher-risk advisers who provided advice to British Steel customers; more than 700 advisers are now understood to have stopped providing pension transfer advice.
Last year, the FCA wrote to all the 7,700 steelworkers who transferred out of the British Steel Pension Scheme, to provide them with guidance on how to assess whether they received suitable advice and how to complain.
It is understood there are still 30 investigations on ongoing into suspected serious misconduct by firms and individuals.
simoney.kyriakou@ft.com
