Date Time
New rules to help curb online pension scams
Under the plans, suspicious requests could be stopped if pensions savers have been approached to access or transfer their savings uninvited via social media.
Such unsolicited contact would trigger a “red flag” which would mean pension trustees or scheme managers can block it.
Many scammers are using social media and other online channels to offer people “too good to be true” incentives such as free pension reviews, early access to their money, or time limited offers. Lured by these attractive offers, people are coerced into transferring their savings into a scam scheme designed to fleece them of their savings.
Pension transfers will be red-flagged and blocked if savers have been approached via social media under stronger anti-scam plans set out by the government on Friday.
Pension transfer scam crackdown risks delaying thousands of transfers
The ‘safe destination’ list could lead customers astray as it implies the DWP will ensure each scheme on the list is legitimate. (Getty)
The government tabled proposals to tackle pension scheme fraud today, but it could risk blocking or delaying thousands of legitimate transfers, AJ Bell’s chief executive has warned.
The plans outlined by the Department for Work and Pensions (DWP) could push providers to ask people transferring to a pension scheme not on the government-approved ‘safe destination’ list a series of questions to determine whether they are at risk of being scammed.
So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap, ‘pension freedoms or consultations around ‘value for money , says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).Download
In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.Download
Find whitepapers
Pension scams: updated industry code of practice; TPR webinar
The Pension Scams Industry Group has published a new version of the industry code of practice on pension scams, which is effective from 1 April 2021. It is important for trustees and administrators to review current practices against the updated Code, as the Pensions Ombudsman judges complaints about transfer due diligence against statutory requirements and industry practice at the time of transfer.
The Code has been restructured and existing content updated to reflect developments since the previous version, including the Pensions Regulator’s (TPR) expectations for trustees and administrators, TPR’s scams pledge and changes in scam practices. Updates include: