Source · Select Committees · Work and Pensions Committee
Recommendation 4
4
Not Addressed
Paragraph: 19
The real scale of pension scamming is undoubtedly much larger than the £30 million reported...
Conclusion
The real scale of pension scamming is undoubtedly much larger than the £30 million reported to Action Fraud, the UK’s national reporting centre for fraud and cybercrime, between 2017 and August 2020. We have even heard examples of individual cases with losses potentially larger than the total amount reported to Action Fraud in those three and a half years. The Pension Scams Industry Group, a voluntary body set up to tackle pension scams, estimates that £10 billion has been lost by 40,000 people to pension scams since 2015. The situation is likely to be getting worse rather than better: scammers in all industries look to take advantage of new situations and covid-19 potentially offered them new opportunities.
Government response summary AI-generated
The government response describes existing governance and monitoring processes for Action Fraud by the City of London Police, and states that additional reporting to Parliament is unnecessary. It does not directly engage with the committee's observation about the real scale of pension scamming being much larger than reported.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
19
Government Response
Not Addressed
HM Government · verbatim extract
Not Addressed
Both the Government and Project Bloom members recognise the difficulty in determining the scale of pension scams and the barrier this creates in effectively tackling the problem. We accept the Committee’s observation that the real scale of pension scams is undoubtedly much larger than that reported to Action Fraud. Pension scammers have changed their modus operandi over time – moving from predominantly pensions liberation to a range of ways that savers can ultimately lose funds – and this has presented new problems that need to be tackled seriously. To develop our assessment of the scale of pension scams we all agree the need to build a better intelligence picture through comprehensive reporting by pension schemes in to Action Fraud. This means improving the number and quality of information reports made by industry. Last November, The Pensions Regulator (TPR) launched its ‘Pledge to Combat Pensions Scams’, one of the key principles of which is to report to Action Fraud, and there are ongoing communications encouraging and clarifying the industry reporting process. As referenced in the introduction, the Minister for Pensions and Financial Inclusion has put on record that the industry has to do a great deal more to do, and has written to pension schemes making it clear that they should work with the Pension Scams Industry Group (PSIG) in order to share their data with wider Project Bloom partners. In addition, Project Bloom partners are working together to understand what further issues and barriers to industry reporting exist, how the reporting processes can be improved, and how data is categorised and recorded. This will provide a clearer and more current picture of the scale of the pension scam problem in terms of financial loss and total volumes of reports relating to transfers, pension scams and investment fraud. Both TPR and the Department for Work and Pensions have conducted their own internal reviews into Project Bloom, The Government will look closely at the recommendations of both reviews and then set out the way forward later this year.
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