The pensions industry is today being called on to publicly pledge to combat pension scams as part of a major new campaign.
Pension providers, trustees and administrators are urged to help protect savers thinking of cashing in their pensions by ensuring they can spot the warning signs of a scam and are informed of any risks when they look to make a transfer.
Industry will also be challenged to educate themselves about current and emerging scam tactics and adopt best practice when it comes to transfer due diligence. The Pensions Regulator (TPR) has also launched an online interactive training module outlining the stringent processes it expects all trustees and providers to follow to keep savers safe.
The pledge to combat pension scams campaign is being launched by TPR, supported by the Pension Scams Industry Group (PSIG), to stop scammers in their tracks.
More than £30 million has been reportedly lost to pension scammers since 2017, according to complaints filed with Action Fraud. Scammers target pension pots big and small, with reported losses ranging from under £1,000 to as much as £500,000 per saver. While the average victims are men in their fifties, evidence shows they can happen to anyone.
However, the true scale 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.
Executive Director of Frontline Regulation at TPR, Nicola Parish, said: “Pension scams devastate lives. As the first line of defence for savers, trustees and pension providers have a vital role to play in beating the people behind these despicable crimes.
“Scammers are targeting pension pots big and small and so I call on the industry to do its bit and make the pledge to help prevent people losing a lifetime of savings.”
Minister for Pensions and Financial Inclusion, Guy Opperman, said: “With the new measures in the Pension Schemes Bill and this co-ordinated approach, I am confident that we can stop the callous crooks who rob people of their retirement savings.
“I would encourage all pension providers, trustees and administrators to pledge their commitment to this campaign and help do their bit to crack down on pension scams.
“This initiative will also give these industry leaders a chance to step up ahead of the legislative protections outlined in the Bill.”
Chair of PSIG, Margaret Snowdon, said: “The pensions industry has a duty to protect its members from the devastating impact of scammers.
“The pledge to combat pension scams is a great step in raising standards in anti-scam practice. It seeks to make the industry more accountable for pension scams and encourages confidence in implementing the practices set out in the PSIG Code that will lead to greater protection for members.
“I ask the industry to support the pledge and take action to raise awareness of the risks of scams, educate yourselves about evolving tactics and protect members through appropriate due diligence measures.”
Executive Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA), Mark Steward, said: “Pension scammers can destroy a lifetime of saving for a comfortable retirement, so preventing scammers succeeding in the first place is the way to go.
“Pension trustees and providers can play their part in helping savers to be ScamSmart by signing up to the pension scam pledge, ensuring they know the warning signs of a customer who’s being scammed, and carrying out appropriate due diligence on pension transfer requests.”
Meeting the pledge
Today’s campaign launch is the latest action to beat scams. Those that make the pledge to combat pension scams will agree to:
- Regularly warn members of the risk of scams.
- Encourage those requesting cash drawdown to call The Pensions Advisory Service for free, impartial guidance.
- Learn the warning signs of a scam and best practice for transfers.
- Take appropriate due diligence measures and document pension transfer procedures.
- Clearly communicate concerns to members if high-risk transfers must be made.
- Report concerns about a scam to the authorities and communicate this to the scheme member.
Trustees, advisers and providers can sign up to the pledge through the TPR website. They will use our resources and online education tools to understand what they can do to protect savers. Pledgers can also self-certify they have met the six pledge steps.
Notes for editors
- Steps to make the pledge:
- Trustees, advisers and providers can sign up to the pledge through a dedicated website to show their commitment to combat pension scams.
- Pledgers will use our resources and online education tools to understand what they can do to protect savers.
- When the six pledge steps are met, pledgers can self-certify that they have taken action and abide by the six pledge principles.
- Pledge resources:
- Access to the Trustee Toolkit scams module.
- Online – a campaign webpage will drive providers, trustees and administrators to make the pledge and provide them with the necessary information to improve standards.
- Trustee Toolkit: The Trustee Toolkit scams module will help trustees, administrators and providers:
- identify the common warning signs of a pension scam
- define expectations about communicating regular scams warnings to members, both ongoing and when triggered by events such as a transfer request
- understand the questions they can ask members to help protect them from scammers
- describe what constitutes appropriate and proportionate due diligence on transfers
- ScamSmart 2020:
- On 1 July 2020, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) relaunched their joint ScamSmart campaign to help prevent pension scams and educate savers on scam warning signs and how they can keep their pots safe.
- On 26 August 2020, TPR and FCA launched a joint PR campaign to warn savers that being asked to transfer your pension early is a common scam tactic.
- Pension Scams Industry Group (PSIG) Code of Good Practice on combating pension scams: PSIG, the voluntary body set up to combat pension scams through the publication of a Code of Good Practice in due diligence for trustees, providers and administrators, first published its code in 2015 with the key steps to help identify possible pension scams, as well as providing practical guidance such as checklists and sample letters. The latest version of the code has been published to reflect a new world of scamming and changes to the market and scammers’ tactics.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
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01273 648496Make a pledge to combat pension scams, industry urged