Wednesday, August 3, 2022
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Pension regulator steps up scam fighting efforts

The Pensions Regulator (TPR) has launched a new three-pronged scam prevention strategy as concerns over rising vulnerability amongst pension savers continue to rise.

The strategy concentrates on improving the co-ordination of intelligence between scam-fighting partners.

The new strategy will focus on:

  • Educating pension trustees and savers on the threat of scams
  • Preventing practices which can harm savers’ retirement outcomes
  • Fighting fraud through the prevention, disruption and punishment of criminals.

It will complement the work of multi-agency taskforce Project Bloom which is to be renamed as the Pension Scams Action Group to make its scam-fighting remit clearer to the public.

As part of its new strategy, TPR has committed to explore the setup of a hub for the group to co-ordinate intelligence and direct fraud disruption and prevention activity.

It is also exploring opening a “regulator sandbox” to allow the industry to test solutions for scam prevention and intelligence gathering in partnership with other regulators.

The watchdog said it is stepping up its effort to protect savers as increase in the cost of living leaves them potentially more vulnerable to scams.

TPR warned that savers may be lured by offers to access their pension savings early to cover essential household bills or be attracted by fake investments offering high returns that never materialise.

Nicola Parish, executive director of frontline regulation at The Pensions Regulator, said: “Our new scams combat plan sets out to make savers aware of the risk of scams, encourage schemes to adopt higher standards of protection for savers’ pots and secure the intelligence we need to work with others to pursue and punish criminals.

“But this task is not ours alone. We expect industry to lead the way in thinking of innovative ways to protect savers now and in the future.”

Last month TPR and the National Fraud Intelligence Bureau published a joint assessment of the threat from pension scams.

Tom Selby, head of retirement policy at investment platform AJ Bell, said ensuring scammers who attempt to prey on the vulnerable are stopped must be a top priority for everyone in financial services.

He said: “Unscrupulous fraudsters will attempt to take advantage of vulnerability through any means possible, from offering ‘early access’ to pensions to pushing dodgy investments promising sky-high, guaranteed returns.

“Offers such as these might be particularly tempting to people experiencing inflation on the brink of double-digits.

“However, the reality is that, unless you are in serious ill-health, accessing your pension early will lead to a huge tax penalty from HMRC, while being lured by the promise of sky-high investment returns from a scammer could see you lose everything.

“Regulators are right to get on the front foot on this and the vast majority of the pensions industry stands ready to help educate customers about the risks.

“It is particularly positive TPR is taking steps to improve intelligence sharing and testing new scam prevention solutions. It is vital firms share any concerns they have about schemes, firms or individuals with the relevant authorities, and vice versa, to ensure as many savers as possible are protected.”

TPR set up a pledge to combat pension scams campaign in November 2020. The campaign has so far seen over 500 organisations and schemes make the pledge or self-certify that the meet the campaign’s standards.



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