Commenting on the report released by Citizens Advice this week which found that nine in ten people miss common warning signs of a pensions scam, Ian Bell, RSM’s Head of Pensions commented:
‘The Citizens Advice report highlights a growing problem that RSM has been warning about for some time. Our recent pension fraud risk report demonstrated that pension scheme trustees are aware of this growing problem and are taking action to protect members as far as they can. This problem is however far wider than the occupational pensions market as savers with personal pension pots are also exposed to the activities of the scammers. Recent case law also means that insurance companies are obliged to honour transfer requests even if they suspect foul play.
‘There is therefore little to protect the public. The government, having opened up the opportunity for scammers through the Pensions Freedoms legislation, must act now to give insurance companies and pension scheme trustees the ability to make sufficient enquiries and to block transfer requests if they suspect foul play.
‘Raising public awareness will help but will not solve the issue by itself. Without further protective legislation, the problem of fraud in the pensions industry will continue to grow with life changing impacts on the members of the public who are duped into fraudulent transfers. The resulting bad publicity, particularly at a time when Automatic Enrolment is being rolled out, will be very unhelpful.’