Minister calls for schemes scam support
The Pensions Minister has today called on pension schemes to join him in the fight against the scammers targeting people’s hard-earned retirement savings.
In a letter to around 90 different schemes, Guy Opperman said they must begin sharing scam data with the industry’s voluntary group, the Pension Scams Industry Group (PSIG), to create a clearer picture of the scale of the issue.
Greater data sharing, used in parallel with the improved pension transfer rules in the Pension Schemes Act, will ensure savers are better protected from unscrupulous scammers.
Minister for Pensions Guy Opperman said:
“Today I am calling on all pension scheme trustees to support us in the fight against the callous criminals stealing savers’ pension pots.
“While the measures contained in the Pension Schemes Act are a significant step forward, we need government, the individual and industry to tackle this together.
“Pension schemes have a professional, ethical and moral duty to try and prevent their members being ripped off, and better data-sharing is a vital first step.”
Not all pension schemes currently share scam data with the PSIG.
This data is used to inform Project Bloom, a multi-agency taskforce which coordinates efforts to combat pension scams and fraud.
PSIG chair Margaret Snowdon said:
“PSIG currently has 51 organisations participating in its industry forum, where we share information on potential scams. This helps us to protect members, but also means we can benefit from each other’s experience and spot trends early.
“However, we need more schemes to be a part of it – schemes wanting to join can do so directly or by asking their administrator to join our forum.”
On January 27 Guy Opperman gave evidence to the Work and Pensions Select Committee’s inquiry into pension scams.
Since the Minister’s initial request for data sharing during this appearance, PSIG have been receiving a steady stream of new applications to join.
However, around 90 large schemes still do not data-share, weakening Project Bloom’s ability to tackle scams.
More information
- To be part of PSIG, trustees simply need to fill in the application on the Combating Pension Scams website and go through a simple confirmation process.
- Scammers seducing savers with bogus promises will be targeted under new measures in the DWP’s Pension Schemes Act.
- The crackdown will enable trustees in certain circumstances to ‘red flag’ a transfer request, enabling them to prevent the transfer proceeding.
- For other circumstances, members will be required to provide evidence they have taken guidance before the transfer can go ahead. This will prevent people’s hard-earned savings being moved to suspect schemes without them receiving expert guidance.
- It would not prevent savers from making legitimate pension transfers, with the new regime boosting consumer confidence in the protections in place.
- The new system would mean signs of a fraudulent transfer, such as “get rich quick” promises, will be given a ‘red flag’ and other signs, such as unclear costs and charges, would compel the saver to seek independent guidance to ensure they understand the potential risks involved in the transfer.
Letter on sharing scam data with the Pension Scams Industry Group
Dear all,
We all agree that pension scams are a significant issue that we must tackle.
In the coming months, I will be introducing regulations to empower trustees in the fight against pension scams. I intend to make it much harder for scammers to entice your members to transfer their hard earned savings to fraudulent schemes and give you more power to prevent a transfer in certain circumstances. This is a significant step forward, but we must do more.
On the 27 January I gave evidence to the Work and Pensions Select Committee’s inquiry into pension scams. A key theme of my session was the use of information and data to understand the current scale of the problem, and how we use it to get ahead of future scammers. The Pension Scams Industry Group estimate that 5% of all transfer requests cause concern. When giving evidence to the Committee, Peter Hazelwood of Aviva estimated that 95% of scams are from cloned investment sites resulting in a loss on average of £54,000.
We need your help to clarify the extent of the problem. Project Bloom is a multi-agency taskforce that coordinates efforts to combat pension scams and fraud through education, prevention and enforcement. Its core mission is to stop pension scammers in their tracks and industry must to support this fight.
I have put on record that industry has to do a great deal more and I need your support to make that happen. The Pension Scams Industry Group has done a very good job, but their scope is limited. To make a significant impact they need to increase the number of organisations providing them with data. Since I raised this point to the Committee, the Pension Scams Industry Group have been receiving a steady stream of new applicants, we must strive for more. I am asking you to support us in the fight against the criminals stealing the retirement savings of pension savers. It is imperative that you work with the Pension Scams Industry Group in order to share your data with wider Project Bloom partners, to help us stop pension scams altogether. If you are not able to help, I would very much like to understand why.
By working together in a co-ordinated way we can stop people losing their hard earned savings.
Guy Opperman MP Minister for Pensions and Financial Inclusion
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