New hope for pension scam victims from ‘landmark’ ombudsman ruling

Pension scam victims have received new hope as the result of a "landmark" ruling" by the Pensions Ombudsman, according to Royal London director of policy Steve Webb. Julian Marr reports

Pension scam victims have received new hope as the result of a “landmark” ruling” by the Pensions Ombudsman, according to Royal London director of policy Steve Webb.

The decision related to a police officer who had transferred out his police pension into a new scheme but then became concerned that, as the ombudsman noted, the money had been “lost or misappropriated”.

The ombudsman ruled the Northumbria Police Authority had failed the policeman in two ways – by not sending him the official anti-scam ‘Scorpion’ literature prepared by the Pensions Regulator; and by not carrying out proper checks on the pension scheme into which the money was being transferred.  The ombudsman ruled the scheme was guilty of maladministration and ordered it to reinstate the police officer’s pension rights as far as possible.

‘This is a very important ruling,” said Webb. “While individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this shows pension schemes also have important duties to protect members – not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to.”

He added: “It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still receive redress if the ombudsman thinks their scheme trustees did not do a proper job in protecting them.”

A particular issue highlighted by Webb was that the receiving scheme – an occupational scheme called ‘London Quantum’ – had been set up relatively recently. “It should have been obvious a Northumberland police officer was unlikely to have a work relationship with a London-based occupational scheme,” he commented.

‘Chance of redress’

Although an ombudsman’s ruling relates only to a specific case, Webb suggested this decision showed schemes have important responsibilities towards their members – not only in alerting them to the risk of scams but also in performing proper checks on the receiving scheme.

“It is possible scam victims who have complained to schemes and been turned away might now find they get a chance of redress via a complaint to the Pensions Ombudsman,” he added.