In yesterday’s debate on Online Harms, I urged the Minister to act to stop people losing their pension savings through scams. The Government doesn’t want to tackle this in its Online Safety Bill. It needs to think again. pic.twitter.com/uU5CRBMpOW
— Stephen Timms (@stephenctimms) April 29, 2021
The Work and Pension Select Committee’s study on pension freedoms has morphed into an all out struggle with the Government to protect British savers from online scams.
In parallel with the WPSC, the All Party Parliamentary Group on Pension Scams has been meeting with the help of its secretariat the Transparency Task Force.
The TTF have been meeting regularly on this subject and a recording of its most recent session can be watched and listened to here.
Stephen Timms is only one of a number of speakers on this recording , his contribution starts at 1.43.
Pension scams pre-date the introduction of the Pension freedoms that came in , in 2015. Prior to the freedoms , scams were about circumventing the restrictions on drawing pensions. Since the freedoms, the emphasis of the scammers has been on the freedom to self-invest pensions and draw the benefits as people like.
- the imaginative and seemingly responsible investment strategies of the crooks.
- the delivery of the advertising – seemingly endorsed by google and other platforms
- the quality of service which accompanies the scammers offer
- the freedom of not having to listen to organizations like Pension Wise, telling them to act with caution.
The online safety bill which Stephen Timms refers to , does not cover financial harms , which will be carved out. Timms wants financial harms to be included and it is difficult to find any argument that
Timms’ report calls for prevention against scams and enforcement
- restrictions on transfers where trustees refuse to transfer “red-flagged” transfers. This is likely to go ahead in October
- support for people thinking of transferring rights – a better pland for making Pension Wise the norm. Only 1/33 people eligible for Pension Wise currently use the free appointment.
- inclusion of financial harms as part of google and other’s “duty of care”.
- better sharing of intelligence on scams with legislation for industry participation in information on scams.
Fraud accounts for 1/3 of British crime but gets only 1% of police resource devoted to it. There are so many regulated bodies involved in the prevention of scams that scammers use the confusion to promote their scams , often using a seeming endorsement from one body to justify its crooked actions.
As regards enforcement, the voluntarily funding and voluntarily participation in Project Bloom, the pension industry’s agency to prevent and enforce against scams, is not-according to Timms, strong enough (and sounds like a gardening imitative). He’s calling for a revamped industry body with proper powers, greater focus and better resource
I’m sure we’d all support the recommendations that Timms is making but they are reactive. Timms warned against the danger of freedoms in 2014, Plato got there before him
— Henry Tapper (@henryhtapper) April 30, 2021
The curse pension is under is that we have granted freedoms but have made many people slaves to the scammers.
There is a way to provide order again and Timms’ remedies go some way towards doing so, but they are aimed at limiting the damage, not at preventing its cause.
People generally want a firm direction on how to spend their pension pot and if they don’t get a reasonable direction , they will look elsewhere. Scammers will be in their line of sight and scammers will outwit them.
I am being asked this morning to pay £1.09 to an unknown source to receive a parcel from Royal Mail, in doing so I will no doubt have to give my phone number, bank account details and an authority to the scammer to raid my bank account. The message looks remarkably like it came from the Royal Mail. We only have to fall for a scam once to lose a lot.
Thanks to Stephen Timms and the WPSC and thanks to Andy Agethangelou and his work supporting the APPG on Pension Scams.
We now need to make sure people feel no need to press the link and become the scammers slave.