The FT report news uncovered by AJ Bell that people may be safer from scammers – leaving their money in their pensions. The police units that report financial fraud and cyber crime have produced figures
The figures showed reports of pension fraud have been on a downward trend for the past five years, with 345 cases reported in 2018, down from 1,828 cases in 2013. Over this period, the financial losses from pension scams fell dramatically from £96.6m in 2013 to £14.1m in 2018.
Meanwhile – out and out scamming continues , but from people’s bank accounts – not their pension accounts.
The number of investment frauds reported in the first six months of this year hit 8,153, almost double that during the same period last year
On the face of it – this is good news for pensions, but as we found out in the pension transfer debacle, the complex structure of a self invested personal pension allows for so many layers of intermediation that scamming can be “fractional”
The self-invested personal pension has enabled the various participants to double or triple up charges as happened in the unholy alliance between Celtic, Active, Gallium, Vega and Newscape – which took so much money out of the Port Talbot steelworker’s pensions.
If you extract over 3% on a £500m portfolio, why bother with UCIS investments that draw attention to yourself. The ultimate destination of Active Wealth’s advice on money were legitimate funds within the Newscape/Vega DFM. Such fractional scamming is almost impossible to stop – because it relies on permitted practices which only become ruinous when repeated again and again.
The police figures spectacularly miss the point
The days of out and out villainy in pensions are over. And that is because the FCA and tPR are on to the obvious villains. Project Bloom has simply moved these villains along, they are now practicing their trade online – using Linked in and other professional sites to advertise bitcoin crypto-currency nonsense – usually with a fake endorsement and a pretend association with a national newspaper.
Because the villains are cleverer than the coppers, they will stay one step ahead. Bloom is – sadly – shutting the stable door.
One of the insights that Quietroom gave us at our recent workshops (Straits of Hormuz) is that scammers differentiate themselves because of their outstanding customer service.
These points were made by Michelle Cracknell at the time of Port Talbot’s kerfuffle.
Scammers are also clever enough to see just how far they are in front of the chasing pack of policemen and regulators.
The importance of not being complacent
The point is this; the scammers are eroding our pensions slowly through hidden charges which we only find out about after the rot has set in a few years.
The old style scammers are off elsewhere – where the scrutiny is less.
But to think that pensions are scam-free because of the numbers reported at the top of this blog is to spectacularly miss the point,
Sadly the FT doesn’t seem to have worked this out yet – but I am sure Jo Cumbo will put that right!