Financial crime – can we stand idly by?

 

Below’s some correspondence with a senior person in the FCA.

Message sent Wednesday April 23d

Hi XXX

Following on from your recent talk at the MM event, I’m bringing this to your attention https://henrytapper.com/2019/04/23/the-bitcoin-scam-thats-on-your-feeds-today/ This is an unregulated investment which is purportedly endorsed by the Mirror and ITV. It is doing the rounds on social media and needs to be stopped. Good luck in your new position.

 

Message received Wednesday May 15th

Henry, good to hear from you. And apologies for the very slow response. Thanks for alerting me to this. We will take a look at it. I hope you’re well and still keeping the industry on its toes! Best wishes. xxx

  • Henry Tapper sent the following message at 7:57 AM

    Thanks xxx, this is today’s scam  https://birdboxbond.co.uk/ Paul Lewis is alerting people not to go there – can’t we find a way for the FCA to be more agile?

    No alt text provided for this image

    Bird Box Bond

    birdboxbond.co.uk


    Keeping the industry on its toes?

    I can think of many descriptions of the FCA’s reaction to my alert (which was also sent to tPR and Action Fraud. “On its toes” ranks pretty low down the list.

    If we are serious about combatting fraud, we’ve got to be agile and proactive in combatting it. Paul Lewis is, why can’t the authorities respond in real time?


How hard is it to close these firms down?

This week also sees the Times exposing Asset Life , a firm selling debentures with interest rates of 8.75%. 

Paul Lewis picked up on the Times’ story


When I click on Asset Life’s website , I see this – which suggests that the FCA has been successfulScreenshot-2019-05-16-at-06.43.28

This suggests that when the FCA wants to – they can achieve things. It’s just a question of raising its game.

Meanwhile Crypto Crash Fortune continues to trade.  To my mind , a scam’s a scam.


Who needs to cold call?

Whether it be bitcoin trading or mini bonds,  the web is awash with scams which are publicised on social media and allowed to continue way too long. Were it not for organisations like the Times and the BBC exposing these scams, little would appear to be done. My efforts are at least acknowledged by the FCA (after nearly a month) but the vase majority of reported scams – when reported – simply continue. People get no acknowledgment – let alone recognition for whistle-blowing.

We have finally seen a partial ban on cold-calling the vulnerable, but scammers see much easier pickings on the web and so long as our enforcement agencies are so reactive, there is little hope that the pea-shooters that ordinary people use – are worth the trouble.

The public should not have to be reliant on Paul Lewis and the Times and a few other organisations – capable of providing reputational risk to the FCA and others.


This is not about regulatory reputations

At an event in London yesterday, the Money and Pensions Service’s chief of staff – Charlotte Jackson, told her audience that victims typically took 4 years to catch up with a scam. 

I had originally thought Charlotte was saying it was the regulators who were four years behind the pace. Unfortunately – in the world of cybercrime, being four days behind the crime is enough for money to be far enough away to be fully laundered.

I was struck that she spoke at a Fintech event – are we short of a hashtag?

#CRIMETECH

The reason for the time drag is clear to see – if you read this blog of those of others – such as www.pensionlife.com .

It normally takes an escalation of a problem not just to Paul Lewis or the Times, but to Parliament, before the scam is properly addressed.

Read the testimony of Sue Flood and the Ark victims on here to understand how hard it is for people waking up to having been robbed. It may take them four years to find out, but the crime is no less painful for all that. We must protect not re-victimise the victims of crime. HMRC’s current practice of harassing victims of pension liberation fraud is indefensible.

But so is the blame game being applied elsewhere. The FCA are keen to blame intermediaries for not reporting scams but so long as they ignore the reports, intermediaries will continue to ignore the FCA. Port Talbot was visited by the FCA, not because of reports by Al Rush, but because the Work and Pensions Select Committee picked up on reports by the FT.

The sad conclusion I draw from this is that there is little conviction in the regulator’s anti-fraud activities. The primary driver behind them appears to be the avoidance of reputational risk.

So long as the FCA and others ignore the voices of victims and of anyone but the small coterie of media that influence politicians, confidence in their policing will dwindle.

If we are to continue down this line, then we must call into questions one of the central cannon’s of the anti-fraud regulations – “tipping off”.


In the absence of effective policing – will people turn vigilante?

“Tipping off ” is a criminal offence, it is the act of telling a fraudster you know what they are about rather than reporting financial crime through normal channels. It is something that everyone in financial services is warned not to do.

But it supposes that those who we tip-off to, will act in a timely fashion on what they are tipped off about. I see little evidence of those who police us, being on their toes. They remind me of the policemen in the Pirates of Penzance who do no policing but sing their own praises.

If MAPS are right and there is a four year lag in the dealing of financial fraud, then we can expect the FCA to catch up with the current round of scams some time in 2023. Meanwhile those committing today’s scams will either be retiring on other people’s money or finding new ways to stay four years ahead.

We pay for our police and we pay for the financial regulators. The FCA should be as accountable to the public as it is to the Work and Select and Treasury Select Committees.

It should listen to the people who report financial crime to it and not wait for crimes to be escalated through the media till they hit their internal risk register. Financial Crime is not an internal risk for the FCA, it is what the FCA are there to prevent.

If the FCA do not police properly, then the public will. People will not stand idly by and watch those they know get ripped off with no restitution.  They will eventually turn on the criminals themselves, they will ignore the tipping off rules because they see no other way of stopping crime than by becoming financial crime vigilantes.


The FCA may feel this provocative but….

This blog is calling on all regulators involved in Project Bloom, but especially our financial regulators – to raise your game.

We expect proper policing and you are well funded – certainly relative to our police.

It is time you left your legal text-books aside and started protecting the public’s purse as little more than your own reputations.

Unless you show faster response times, you will become the laughing stock not just of the financial criminals but the people who pay you and to whom you are accountable.

People cannot stand idly by, they need you – and if you don’t improve your performance, they will bypass you. It is time you raised your game.

pension scams.jpeg

 

 

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions. Bookmark the permalink.

3 Responses to Financial crime – can we stand idly by?

  1. Phil Castle says:

    They spend their ime and our money re-arranging the deck chairs of the F-pack system and policing the minutiae of the honest advsiers and firms going round in circles with systems and controls so that they flip flop methods of regulation and changing their name and logos as that is all easy, makes it look like they are doing something worthwhile and takes our eyes off their incompetence (or so they think) as they appear to prefer doing that and writing sham consultation papers incraese in FOS limit from £150k to £350K which will result in good honest advsiers leaving while the crooks will just continue).
    Regulating what Henry has highlighted requires some effort and innovation, it also requires someone with drive. I once had a scam pension company phone me and as a result of keeping the numty employee of the marketing company talking, and tapping away on my computere I managed to work out the twon they were in, the building they were in and pretty much the desk they were sitting at. If I can do it as an adviser, it can’t be that difficult to PAY someone to do the same and then breath down the kneck fo these people and keep “moving them on” as you can’t stop it completeley you can just stop them doing it easily and for too long. Neil Liversidge and other advisers from time to time do the same, but the FCA should involve advisers and have a specific proactive team for this and not to draft sham consultation documents as significant costs and no benefit.

  2. John Mather says:

    Sorry to say Henry No Action afraid is a waste of time I reported a suspicion in 2010 no response I then reported money laundering No action I then forced forensic accounting and proved a theft of £615,000. I made a complaint to the RICS but they took no action against the member

    At my own expense and after two death threats after 9 years Thames Vally police have declined to investigate engender though the funding of a new house was the likely way the money was laundered

  3. DaveC says:

    Who want’s to be lulled into a false sense of security that all investments must not be scams.

    This is the fundamental issue with a government wanting to protect us all from everything, and failing, vs individuals exercising some responsibility of their own.

    There is one thing being lured in by a web-advert for an investment (like you pick investments from adverts on websites?), and some scammer that operates by cold-calling at old people’s homes and induces fear and other methods to get what they want.

    A passive advert that looks too good to be true, and any light amount of due diligence (checking social media and other websites/forums) would reveal to be a scam, isn’t a problem in my view.

    As Tacitus said, the more numerous the laws, the more corrupt the nation.

    Is it any wonder that the more the FCA try control matters, the more matters they have to control, and the more badly they control things?

    The financial world is a mess of regulation, obfuscation, and parasitic fee skimming.

    Drastic simplification is required, but as with Rome, that is the last thing that those spinning the plates want. You can hide your repeated failures through obfuscation.

Leave a Reply