A total of £30.8 million in #pension scams have been reported to Action Fraud since 2017, says the Financial Conduct Authority and The Pensions Regulator. Reported losses ranged from under £1,000 to as much as £500,000 with the average victim being a man in his 50s.

— Josephine Cumbo (@JosephineCumbo) August 25, 2020

Shortly after receiving this news on my twitter feed , I had a press release sent me by the FCA reminding me of the dangers of being scammed.

Pension savers claim over £30 million lost to scams as regulators urge footie fans to show scammers the red card

• Putting time pressure on pension transfers continues to be a key tactic for scammers
• Many know more about football finances than their own lifetime savings
• FCA and TPR team up with legendary football commentator Clive Tyldesley to show there is no transfer deadline for pensions

I also got a warning from the redoubtable Pension Bee -Mrs Savova

“There is no doubt that pensions scams are rife, particularly in the wake of the pandemic. Savers should stay vigilant and not feel pressurised into giving away personal information or rushing to complete a pension transfer. As an industry we also need to do our bit to educate people.

There is a wealth of information available, and with so many scams moving online, we’ve decided to create our own online game to raise awareness of scams in an engaging way. It is by learning how scammers operate that we’ll put an end to their ploys”.

You can find Pension Bee’s game, Scam Man and Robbin’ created in conjunction with AgeWage, Nutmeg and Smart Pension here: scam-man.com

The football connection – transfers.

Alternatively you can go to the FCA’s scamsmart site  which is being advertised by football commentator Clive Tildersley.

For what it’s worth, this is that hook

 

TPR and the FCA  said fresh research showed football fans approaching retirement, notably men in their 50s, were being targeted

Typically scammers are putting pressure on people to transfer their pension with short-term offers to release savings.

The FCA and TPR have launched ScamSmart the highlight the issue, with Tyldesley, 65, fronting it.

The veteran commentator said: “Scammers are very good at breaking down your defences and putting you under pressure with various deadlines. But your pension isn’t a football transfer – there are no deadlines! Your favourite team wouldn’t buy a new striker just because his agent says he’s good.

Football’s transfer deadline may have been responsible for a few dodgy transfers but it is stretching an analogy to suggest that football fans are prey to transfer deadlines for their pensions.

Tyldesley recently said he was “upset, annoyed, baffled” at ITV’s decision to replace him as the broadcaster’s senior football commentator in favour of Sam Matterface.

My advice to Clive is that he makes a better football than pension pundit. The whole idea is far-fetched and faintly ridiculous.

£30.8m – surely the wrong number?

£30.8m is the amount reported to Action Fraud. Out of a total pension savings pool of some £2.5 trillion it does not strike me as a huge amount. I actually had to check the FCA press release to make sure that m wasn’t a bn.

There are around 30.8m football fans in the UK, I am one. The FCA’s celeb endorsement of the Scam smart site hangs on a number that bears no relation to the true size of the problem.

I refer to an early comment on here by Richard Chilton, which I’m integrating into the blog.

I think there is a big messaging problem with pension scams. Scams that are criminal acts do seem to be incredibly rare. By far and away the biggest risk seems to come from financial services organisations that can validly quote an FCA registration number. The compensation awarded by regulators dwarfs the frauds reported to Action Fraud. Perhaps the warning messages to those with pensions should concentrate on the chance of being fleeced, rather than on the risk from criminals.

Let’s take one example of “fleecing” which is generally considered a scam.

If the FCA are serious that at least half of the BSPS deferred membership were wrongly  advised to transfer, then they are saying that at least half the £3bn taken out of BSPS was scammed. That’s £1.5bn. I doubt that any of these transfers was reported to action fraud but the total mis-transferred is around 45 times the total reported to Action Fraud in the past 3 years.

BSPS represents a tiny fraction of total DB transfer problem and that’s before we start looking at the problems with transfers from good quality workplace pensions into insalubrious SIPPs.

For sadly, much of the damage has been done by  regulated advisers who did not follow the FCA’s rules and the fractional scamming, where many organisations take a small cut leaving a big hole in people’s pensions, continues to this day.

The truth is that the FCA do not have a number for the amount that leaks out of the system through dodgy advice.  The resources at their disposal to stop scamming are so small that they cannot even report on the proper size of the problem.

Under- resourced as the FCA are , they should work with the private sector

It would be better for the FCA that they reached out to organisations like Pension Bee and ourselves and promoted the tools that we have curated . It makes no sense to  hang an initiative as important as Scam Smart on a hook as lightweight as this one.

The FCA could and should have participated in the Scam man project and missed a trick not using the Scam Man game.

They should work with Margaret Snowden and the Pension Scams Industry Group, and they should work with the Transparency Task Force who are liasing with the All Party Parliamentary Group on pension scams. And they should be integral to the WPSC’s current inquiry.

They should work with Angie Brooks and others who have the intelligence on the scammers operating out of Southern and Eastern Europe who reside beyond the FCA’s regulatory perimeter.

And they could talk a long hard look at the offshore arms of some FCA regulated firms who appear to be at least complicit with the trafficking of money out of the UK pensions system and into the back-pockets of unregulated advisers.

As the problem is one of resource, the FCA must find ways to integrate with the pensions industry which has (by and large) common intent to drive the scammers away. Weak campaigns based on incomplete data do not solve the problem, they give the scammers courage,