Updated code to combat pension scams
Posted on Jul 12, 2018
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The Pension Scams Industry Group (PSIG), the voluntary body set up to combat pension scams, has updated its code of practice: Combating Pension Scams - A Code of Good Practice.
The original code was first published in 2015 and set out key steps to help identify possible pension scams, as well as providing practical guidance, such as checklists and sample letters. The code has no statutory basis but schemes have been adopting its guidelines, which is it thought will have saved many people from a likely loss of pension savings.
According to the Financial Conduct Authority (FCA), in the past 12 months, 23 per cent of adults have received an unsolicited approach about pensions or investments that could be a scam.
The PSIG has emphasised that scam victims must take responsibility for fraudulent defined benefit transfers where they have been previously warned by their providers.
Transfers out of schemes have grown in recent years, which has raised concern over the true extent of scam activity. According to Origo (a not-for-profit fintech firm), between January and December 2017, transfer volumes hit £30.9 billion, up from £24.3 billion during the previous year.
The code was updated to reflect how the world of scamming has changed and, according to an article in Financial Reporter, highlights include:
- A focus on vulnerable customers.
- How schemes can talk to transferring members to collect better information.
- Recommending schemes refer insistent members to The Pensions Advisory Service (TPAS) for impartial guidance.
- Making it easier for schemes to report suspected scams to Action Fraud.
- Expanded template letters and stronger member discharges.
- Case studies portraying real decisions made by real schemes.
“The growth in international SIPPs [Self Invested Personal Pensions] and QROPS [Qualifying Recognised Overseas Pension Schemes] means that the scamming landscape has changed significantly in recent years,” said Margaret Snowdon OBE, Chair of the PSIG. “This, coupled with more members wanting to exercise pension freedoms and ever more sophisticated scamming tactics means we need to be able to respond effectively. Scammers spend time grooming their victims, so we encourage schemes to speak with members to fully understand their situation and refer insistent customers to TPAS, who can explain the risks of scamming from an impartial standpoint.”
Added Michelle Cracknell, Chief Executive of The Pensions Advisory Service: “The scourge of pension scams continue with the scammers taking advantage of people being disconnected and not fully understanding their pensions. The types of scams continually evolve with many being legal, making it even harder to protect the customers. We are delighted that PSIG has updated its code as it is imperative that we all work together to try to stop customers falling victims to pension scams.”
For more information about planning for your retirement or to receive a copy of a document providing advice about being scammed, which has been produced by The Pensions Advisory Service, give us a call on: 01892 500 600.