The Pensions Regulator (TPR) has shed some light on the criminals at the centre of multi-million-pound pension scams - so-called “fraudster families.”
The regulator has worked with other government agencies on Project Bloom, set up to tackle pension scams.
Project Bloom has identified a number of gangs with close family ties targeting pension savers. A number of criminal investigations into these family gangs are underway between TPR, government agencies and the police.
It says a number of cases are ongoing. The common theme appears to be family ties among the conspirators, with relatives benefiting from the scam. TPR says it has evidence of criminal behaviour worth tens of millions of pounds, involving siblings, married couples, parents and their adult children.
TPR says in some instances the criminal families hire rogue financial experts with specialist pension knowledge, including accountants, advisers and trustees, to manage big scams for them.
The regulator says without the help of these rogue experts, the scams would not be possible.
Nicola Parish, TPR’s executive director of frontline regulation, says: “Trustees and administrators play a key role in preventing members from falling victim to scams by identifying suspicious requests early.
“The better they are at spotting the signs of a scam, the quicker members can be warned and we can investigate. Working together we can target those trying to plunder people’s pension pots and bring them to justice.”
Guy Opperman, minister for pensions and financial inclusion, adds: “Scammers who siphon off savings built up over decades are the lowest of the low. When you’ve worked hard and done the right thing, you don’t expect a con artist to rob you of the future you deserve.
“We’re determined to put a stop to the misery these callous crooks inflict, which is why we’re supporting the work being done to stamp out pension theft.”
How to protect yourself
The Financial Conduct Authority (FCA) has found that scammers are increasingly moving online when it comes to methods of defrauding victims.
Charlotte Jackson, head of pensions guidance services at the newly-created Single Financial Guidance Body comments: “Pension scams can be devastating for anyone that falls victim to one. In many cases a lifetime’s savings can be lost in moments.
"Evidence has shown that prevention is the best defence against pension scams. While our research says eight scam calls take place every second, the good news for consumers is that the pensions cold-calling ban introduced last month means no legitimate provider will contact you in this way.
"Reject any unsolicited calls, emails or knocks on your door. Check the FCA register for regulated companies, or the warning list. If you’re thinking about an opportunity, seek independent financial advice from an FCA regulated firm."
"Anyone that has any concerns about pension scams should contact The Pensions Advisory Service for free on 0800 011 3797, or for more information visit www.fca.org.uk/scamsmart.”
Here are six common warning signs to look out for from fraudsters:
1. Unexpected contact – Traditionally scammers cold-call but contact can also come from online sources e.g. email or social media, post, word of mouth or even in person at a seminar or exhibition.
2. Time pressure – They might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
3. Social proof – They may share fake reviews and claim other clients have invested or want in on the deal.
4. Unrealistic returns – Fraudsters often promise tempting returns that sound too good to be true, such as much better interest rates than elsewhere.
5. False authority - Using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
6. Flattery – Building a friendship with you to lull you into a false sense of security.