TPR unveils scam-busting plan amid cost of living crisis

TPR will also support the implementation of the DWP's Stronger Nudge to guidance regulations.

The regulator will explore how anti-scams messaging could be promoted through employers and continue to encourage the industry to go beyond minimum compliance and engage savers with their pensions. TPR also wants to improve the consumer journey, including a review of guidance on member communications for scam-prevention messaging.

The regulator will consider opening a “regulatory sandbox” to allow industry to test solutions for scam prevention and intelligence gathering in partnership with other relevant regulators.

TPR’s plan noted three main drivers of pension scams, which have evolved from pension liberation into a much wider number of scams. 

First, it observed that too many schemes that savers transfer out of have poor governance and administration and are unable to spot the signs. 

It also acknowledged that overlapping regulatory jurisdictions means scammers can skirt the regulatory perimeter and avoid detection. It added that in the past, advice payment incentivisation had meant that decisions were not made in savers’ interests.

More resource needed 

TPR recently published a guide to reporting pension scams to help schemes report suspected scams to the correct authorities.

Philip Brown, director of policy at B&CE, provider of The People’s Pension, supported TPR’s new strategy, warning that the cost-of-living crisis will “leave many savers more exposed to ‘too-good-to-be-true’ offers”.

Simon Miller, director of policy and communications at Stop Scams UK, said that as the crisis starts to bite, much more is needed to take the fight to the scammers and help keep people safe.

“More resource is needed for enforcement as is greater coordination of both the government response to scams, and that of the industry,” he warned. 

Becky O’Connor, head of pensions and savings at Interactive Investor, said it is important to have a better understanding of what a pension scam is, praising TPR’s definition of the ‘seven types of pension scam’.

“It’s vital for an industry that has been no stranger to scandals to clamp down on pension scams — trust in pensions is important if people are going to be able to retire well in years to come,” she added.

Stephanie Baxter is a freelance reporter for Pensions Expert, FTAdviser's sister publication