Regulators accused of ignoring pension scam warnings

Regulators in the UK have been accused of ignoring warnings of potential pension scams by Transparency Task Force (TTF) founder, Andy Agathangelou.

Speaking at a Work and Pensions Committee (WPC) oral evidence session, as part of its inquiry into pension scams, Agathangelou said the TTF believed it had “hard evidence” that regulators were warned “many years previously” of organisations that scammed savers.

“Having innocent people tricked into moving their pension funds, their life savings, into what is a known fraud, is scandalous, it is a national scandal,” Agathangelou added.

“To make it worse, there are many instances we believe, and we believe we can support this with hard evidence, where the scams are scams that were reported to the regulators many years previously, sometimes by individuals, sometimes even by other regulators in another part of the world, saying: ‘There’s something not quite right about that organisation, we suggest you investigate with the view of closing them down’.

“If that kind of hard evidence is ignored, then what hope have we got?”

Agathangelou said that the regulators need to “rise to the challenge” of recognising the fight against scams is difficult and fast moving, and to expose themselves to some risk for “the greater good”.

During the session, rogue adverts, particularly those online, were highlighted as a key tactic used by pension scammers to target vulnerable individuals.

Agathangelou stated that “many volunteers” had alerted the regulators to evidence of adverts that were front for criminal activity, but the TTF was “not convinced” that the warnings were being effectively picked up by the regulators.

“The big worry is that unless the regulators clamp down on this, it is a phenomenally scalable business for these crooks,” he noted.

Responding to the claims, a spokesperson for The Pensions Regulator (TPR), said: “TPR has a process in place for referring adverts and websites of concern to the appropriate agencies, who are best placed to take action to remove them.”

Agathangelou also cited TTF concerns around pension transfers where part of the process involved an unregulated entity operating outside of the UK.

“The regulators, we believe, have incorrectly deemed such cases to be outside their jurisdiction,” he continued.

“We believe they are inside their jurisdiction if it is a UK registered, regulated entity that actually transacts the transfer.

“We think there is a huge breach going on that needs to be looked at and we think that many people have been told by the regulators that the regulators cannot help because it is outside their jurisdiction and the regulators we believe, in some cases, maybe many cases, are actually wrong.”

A TPR spokesperson commented: “As part of our intelligence function, we monitor evidence of transfers involving unregulated entities operating outside of the UK during our investigations.

“We continue to work with national and international law enforcement partners and UK and overseas regulators to protect savers and, where appropriate, make use of all legal avenues to support our work including in our criminal prosecutions and restraint and confiscation proceedings.

“We will continue work with other agencies through Project Bloom to bring scammers to justice, taking a lead role or supporting other agencies and law enforcement partners as appropriate. But we also know education is one of our best weapons in that battle. Anyone can be a target, which is why it’s vital all savers should be ScamSmart, know the common signs of a scam and always check who they are dealing with.”

To help tackle pension scams, Agathangelou advocated the creation of a joint taskforce that is an entity in and of itself, which can reach the information and powers of all the other agencies but has central control, central responsibility and central accountability.

He also encouraged the WPC to invite all UK pension schemes to report on all the transfers that had taken place since October 2002 and report which ones occurred without evidence that sufficient due warnings were given.

Pensions Age has also contacted the Financial Conduct Authority (FCA) for comment.

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