The Pension Scams Industry Group (PSIG) has updated its voluntary code of practice to reflect regulatory and legislative changes that have affected the industry over the last year.
The updated Combating Pension Scams code, published today (10 June), applies to all transfer requests, and aims to reflect how the tactics of scammers have evolved.
There have been 10 key changes to the document since the June 2018 version in order to provide further guidance for trustees, providers and administrators on various initiatives.
These include the cold-calling ban, which came into force in January this year; The Pensions Regulator (TPR) and The Financial Conduct Authority’s (FCA) ScamSmart campaign launched last year; and the Money and Pensions Service, which launched in April.
Pensions and financial inclusion minister Guy Opperman said pension scams are “callous crimes” and he is determined to “stamp them out”.
“There’s good work already going on – the FCA’s ScamSmart campaign stopped £33m falling into crooks’ hands last year alone,” he said.
“But we need to do more and this new code will help pension trustees keep pace with this evolving threat and protect people from these wolves in sheep’s clothing. It is essential reading for all those working in the industry.”
The group launched the first version of the code in 2015, setting out and encouraging good due diligence to protect individuals from scams. It followed the introduction of Freedom and Choice in the same year, which has led to growing concern that people are being contacted by fraudsters and that scammers have become more sophisticated.
PSIG chairwoman Margaret Snowdon noted there has been “good progress” in the fight against scams with much of members’ money being saved from “the clutches of scammers”.
“But scammers are cunning and will always evolve their techniques, which is why we continue to develop our code,” she added.
“It will take the introduction of legislation to truly end the growing problem of pension scams but in the meantime, our voluntary code provides essential guidance and tools to help trustees and providers identify, and protect, their members and themselves from suspicious activity.
“The human cost of pension scams is huge, so we must all do our utmost to prevent them.”
TPR executive director of frontline regulation Nicola Parish added: “The pensions industry plays a vital role in the fight against scams by stopping suspicious transfers and alerting regulators and law enforcement agencies to fraudulent activity so we can take action.
“The updated code will allow providers to more easily understand how they can help to prevent savers losing their funds to criminals.”
Earlier this year, the PSIG published a report which claimed over half of red flags raised by schemes on suspected scam pension transfers involved advisers or unregulated introducers.
Key changes to the code
- The cold-calling ban
- TPR and FCA’s ScamSmart campaign and TPR’s threat assessment update
- The launch of the Money and Pensions Service
- The Pensions Ombudsman determinations update and implications
- The rise of claims management firms
- FCA Letter: Managing the risks of defined benefit to defined contribution transfers
- FCA, TPR and The Pensions Advisory Service joint protocol
- PSIG’s scams survey pilot 2018
- Revised Action Fraud reporting guidance
- Additional case studies