Industry praises WPC for laying bare ‘colossal scale’ of pension scam challenge

The pensions industry has welcomed the publication of the Work and Pensions Committee’s (WPC) report on pension scams and praised its “breadth, depth, clarity and potency”.

Its Protecting pension savers—five years on from the pension freedoms: Pension scams report called for tech firms to be held to account for facilitating scam adverts, increased regulation to fight online scams, and the consolidation and further funding of anti-scam agencies.

“We went on record stating that we hoped that Stephen Timms’ MP’s committee would use its unique position to fully embrace the problem of pension scams as a major public interest issue, champion the interest of the public, lead a full and transparent inquiry, and bring together all key stakeholders,” said Transparency Task Force founder, Andy Agathangelou.

“They have done all that, and more; and they have done it all superbly - their report is impressive in its breadth, depth, clarity and potency.

“Once again, I find myself thinking ‘thank goodness for the WPC' - for they bring desperately needed parliamentary scrutiny and constructive challenge to the work of the regulators.”

The Pensions Regulator also welcomed the report, with its executive director of frontline regulation, Nicola Parish, saying the regulator would “examine the recommendations closely”.

“Pension scammers wreck lives and as we have shown through Project Bloom, only by taking a coordinated, multi-agency approach to education, prevention and enforcement, can we beat pension scammers and protect the retirements of millions of savers,” she added.

AJ Bell senior analyst, Tom Selby, said the report “pulls no punches” in “laying bare the colossal scale of the challenge facing policymakers”.

He continued: “The interventions proposed by the committee, while significant, are proportionate to the size of the problem and have the potential to dramatically boost protections for savers.

“Tackling online advertising is the most obvious place to start, and the government should seize this opportunity to include financial scams in the upcoming Online Safety Bill.

“Holding social media firms and internet companies accountable for the content they display would be a huge step in the right direction in the fight against fraudsters, allowing authorities to get a grip on scam-ridden world that increasingly resembles the Wild West.

“While creating an organisation specifically focused on scams would undoubtedly be a positive intervention, in reality the vast majority of fraud now occur outside of pensions.

"We therefore believe calling this organisation the Financial Scams Centre, rather than the Pensions Scams Centre, would be more appropriate and help ensure interventions are targeted where the most significant problems lie.

“Creating and properly resourcing a Financial Scams Centre suggests could make a real difference to people’s lives, ensuring scammers’ increasingly sophisticated models are tracked and, where possible, stopped in their tracks.”

The People’s Pension director of policy, Phil Brown, stated that the report underlines how much still needs to be done to tackle pensions fraud.

He welcomed the committee’s recommendation for scam victims to receive more support and its call for a new Pensions Scams Centre, as this would “ensure there is greater co-ordination in the fight against pensions fraud”.

The report highlighted the need for pension scheme boards to have good member-nominated trustees, according to Association of Member Nominated Trustees co-chair, David Weeks.

“Second, turn the spotlight on the independent adviser industry,” he continued. “Some of these seem reluctant to stick to a simple brief to vet an individual investment. They want instead to wander off on general lifestyle financial planning exercises to justify extra fees”.

Association of British Insurers director of long-term savings and protection, Yvonne Braun, said the report made “many helpful recommendations which we warmly welcome”.

“Efforts to combat and deter fraudsters must be stepped up urgently by the authorities to change fraudsters’ risk / reward trade-off,” she added.

“Fraudsters are also increasingly using online channels and social media, and we strongly support including financial scams in the Online Safety Bill. Until legislation is in place, we also agree that social media platforms should immediately remove content at a regulator’s request to protect consumers from financial scams.”

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