Are we doing enough to stop pension scams?
The question was asked by MP Nigel Mills at the Jan 6th Work and Pensions Select Committee’s session chaired by Stephen Timms.
The question was directed at the Mark Steward, Executive Director of Enforcement and Market Oversight, Financial Conduct Authority. Unfortunately , despite this session being conducted on-line and focusing on on-line fraud, Mark was off-line for much of this part of the event. He did not have sufficient bandwidth to deliver his answer properly.
Most answers to the committee’s questions seemed to have been pre-prepared so what we got carried little personal conviction and had that awkward feeling of collusion that has haunted Project Bloom since it was established.
The session started with the ridiculous suggestion that pension scams had cost the British public £30m. With the impact of Dolphin Trust alone estimated to have cost Britain’s retirement savers over £1bn, this number was left hanging in the wind. There was consensus that the average scam was costing the British pension victim £82,000, simple maths tells us that this adds up to around 360 savers.
The Work and Pensions Select Committee did not push back on these numbers, nor ask why a key witness hadn’t appeared with a proper internet connection. Indeed there was a disappointing lack of penetration in the questions from the Chair down.
What are we doing to stop pension scams?
The awareness campaigns appear to have been effective, 85% of people asked said they recognized the TV adverts and that they were about being smarter about combatting fraudulent approaches.
But despite its growing maturity, Project Bloom is still a mystery to most of us, a loose affiliation of regulators and well intentioned groups with no clear leadership (I learned that tPR is the nominal lead). Action Fraud remains a sump collecting information that drains down from victims and their representatives from which nothing returns.
If the public are to be relied on for information , then the public need to be rewarded with at the least acknowledgement. Those acting as witnesses to the session complained of being under-resourced, but the complaint from many, myself amongst them, is that the resource they should be tapping into is the wealth of media reports of scams which seem to be ignored until a scandal breaks.
The BSPS fiasco is not being talked of by TPR as its learning experience and it was good to hear Nicola Parish talking of how future restructurings would be dealt with differently. But the “this time is different” statements need to be accompanied by some hard evidence that things have changed
Take my attempts to warn about the Audax pension scheme which had been promoted on my linked in website. I was approached to promote Audax on Pension PlayPen and I did some preliminary due diligence which caused me to smell a rat. When I tried in 2015 to bring these issues to TPR, I was told that I was in danger of tipping off the perpetrators. The lag between my informing on Audax (and the public being warned about Audax – was five years.
Now the scammers have mutated their delivery to pick up business through lead generation on the web. Martin Lewis and others have their images cloned to promote Bitcoin investment, my top read blog in 2020 was a warning against this type of fraud. Never has tPR or any other part of Project Bloom found a way to reach out to understand the intelligence on this blog.
Nor is it using the extraordinary intelligence being assembled by the anti-scams action group of the Transparency Task Force. Alex Varley-Winter’s blogs on the various scams she follows are a comprehensive chronicle of how scamming is mutating and what trends are emerging.
Then there is the tireless work of the True and Fair Campaign, organised by Alan and Gina Miller which holds a light up to the failures of Government – the FCA in particular – to face up to the grim behavior of some parts of the financial community. Scamming is not a fringe activity, it goes on to this day within the banking and funds industry .
And there is the campaigning work of journalists such as the You and Yours team in exposing specific scandals such as the Dolphin Trust (German Property Company) scandal.
Finally there is the world of ex-patriot activity chronicled by Angie Brooks and her associates on Pension Life.
There is an extraordinary effort from the private sector to self-regulate
It was a shame that the session did not pick this up and that the various witnesses were too keen talking up their game to recognize the part played by the private sector is bringing fraud to light.
The issues raised by those on the committee about the ongoing persecution by HMRC of those who have lost their pensions through “pension liberation” scams and are now having to pay penal tax charges from money they no longer have was brought up by the committee but sidestepped by the witnesses who referred the problem back to Government.
To the private sector, these witnesses represent Government
Nicola Parish, Executive Director of Frontline Regulation, The Pensions Regulator; Commander Clinton Blackburn, National Coordinator for Economic Crime, City of London Police; Mark Steward, Executive Director of Enforcement and Market Oversight, Financial Conduct Authority; Graeme Biggar, Director General, National Economic Crime Centre
Their complaint is that they are under-resourced
Fraud makes up about a third of all reported crime but currently less than 1 per cent of police are investigating fraud, says Graeme Biggar, Director General, National Economic Crime Centre
“Unsurprisingly that does not lead to brilliant outcomes (for victims),” he says.
— Josephine Cumbo (@JosephineCumbo) January 6, 2021
But they ignore the resource provided them by the TTF, my blog, the True and Fair Campaign, Pension Life and the the many private financial journalists including Martin Lewis, who expose scams as they occur.
What is needed is more transparency about what is happening within Project Bloom and a much greater co-operation between Bloom and those who wish to help it, but have no Government funding.