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Scale of pension scams 'underestimated by 5000%'

Scale of pension scams 'underestimated by 5000%'

The problem of pension scams could be underestimated by as much as 5000 per cent, Margaret Snowdon, chairwoman of the Pension Scams Industry Group (PSIG), has said.

Appearing on the first episode of the Pension Regulator’s podcast series, TPR Talks, Snowdon said the industry is not entirely consistent on what a pension scam is so there are inconsistencies in the collection of stats about them.

This made it difficult to see the true scale of the problem, she warned.

Also appearing on the podcast, Nicola Parish, TPR’s executive director of frontline regulation, said figures for pension scams were being collected in different places and scams were underreported.

Parish said: “It is important the industry reports these suspected scams and they need to report them via Action Fraud.

“Getting that clear understanding of the scale of the problem and good quality intelligence will help in how we formulate and what we do about pension scams.”

Both Snowdon and Parish said the industry needed to do more to combat scams, including boosting their reporting levels and being more innovative.

Parish said: “There are some industries where we have seen some real innovation in tackling scams and I would really like to see the pensions industry put its thinking cap on and come up with some new and innovative ideas to help us in Project Bloom to tackle pension scams.”

Meanwhile, Snowdon said many schemes don’t report scams because it is “a bit of a hassle”, whereas victims hold off on reporting because “there could be tax consequences so they like to stay below the radar”.

Both Parish and Snowdon also showed support for plans by pensions minister Guy Opperman to write to pension firms to ask why they are not sharing scam data.

More than £30m has been reportedly lost to pension scams since 2017, according to complaints filed with Action Fraud, although the figure is likely to be much higher as savers often fail to spot the signs of a scam and don’t know how much is in their pots.

Additional Action Fraud figures, published last month, showed fraudsters pretending to be legitimate companies stole £78m from unsuspecting victims through pension and investment scams in 2020.

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