Industry welcomes regulators' warning on scams

The industry has welcomed today’s joint statement from the Financial Conduct Authority (FCA), The Pensions Regulator (TPR) and the Money and Pensions Service (Maps) on raising member awareness of pension scams.

The statement highlighted the increased risk of pension scams amid the COVID-19 pandemic and urged savers to avoid making “hasty decisions” about savings that have taken “a lifetime to build”.

The move has been welcomed by industry experts, with AJ Bell senior analyst, Tom Selby, praising the regulators for being on “the front foot,” by proactively warning savers about the risks posed by pension scams.

“Scammers’ tactics are evolving all the time," Selby continued, "and increasingly we see complex schemes promoted online through social media. This virtual Wild West is a natural home for fraudsters, with governments around the world struggling to create meaningful protections for consumers.

“Ultimately the best way to protect your pension is to arm yourself with the tools and knowledge to spot a scam and steer clear.”

The statement also received support from The Savings and Investing Alliance (Tisa), who said the guidance was “urgently needed” in the current crisis.

Tisa strategic policy director, Charles McCready, added: “We are seeking to support these actions by working with member firms on enhancing customer communications that can be used to help people make better, more informed decisions.

“This is a critical time in helping non-advised customers who need support now more than ever."

The regulators' statement also emphasised that TPR is working with scheme trustees in the defined benefit space to "manage schemes’ risks" and "do all it can" to protect benefits.

This message of reassurance was praised by Now Pensions chair of trustees, Joanne Segars, who stated that it was “our responsibility” as an industry to “reassure and remind savers” about the benefits and security associated with a pension.

Segars added: "Pensions are a long term strategy that can weather the rises and falls in the economy.

"We welcome the joint statement from the FCA, TPR and Maps today which urges savers to not make any rash decisions about their pensions during this volatile time.”

This praise was echoed by former pensions minister, and Lane Clark and Peacock partner, Steve Webb, who again urged savers to check with impartial sources of advice and guidance before making financial decisions.

Whilst the industry has been supportive of raising awareness of pension scams amongst members, there has been calls for greater regulatory and legislative updates to support members in the fight against pension scams.

Former pensions minister, Ros Altmann, recently called for a suspension of transfer activity for 6 months, also highlighting issues around the existing support structures referenced in the regulators' statement.

Altmann stated: “PensionWise guidance cannot offer face to face sessions at the moment, so telephone and remote services will be delivered, but if people fall prey to scams they may not bother to take any guidance or advice."

However, she has since praised TPR’s decision to suspend cash equivalent value transfer activity for three months, describing this as a “sensible and pragmatic decision” that will protect scheme members who are at heightened risk of scammers.

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