FCA urged to do more to protect DB and DC members from scams

Hope William-Smith reports

The Pension Scams Industry Group (PSIG) has called on the Financial Conduct Authority (FCA) to consider further interventions to protect pension scheme members from scams.

This comes after the regulator announced the end of contingent charging from 1 October in a policy statement last week.

The PSIG has said both defined benefit (DB) and defined contribution (DC) scheme members need the FCA to now “go further” given members’ increased susceptibility to scams during the coronavirus pandemic.

More than 11,000 coronavirus-themed scams totalling over £5m have been brought to ActionFraud since February, with Press Association having identified pension-related scams as the most common.

PSIG deputy chair Tommy Burns said improving pension scheme member understanding would be key to ensuring better overall member outcomes.

“The further proposals outlined by the FCA are a very positive step,” Burns said. “The issue of pension scamming is one which affects customers with all types of pension products, however, and has been facilitated not only by unregulated advisers and intermediaries, but also by FCA-regulated entities.”

He continued: “With this in mind we now urge the FCA go further and consider more interventions so that we can prevent both DB and DC contribution pension scheme members from falling victim to pension scams.”

The call for more action from the FCA comes after it joined with The Pensions Regulator, the Pension Protection Fund, the Department for Work and Pensions, the Financial Services Compensation Scheme, the Money and Pensions Service, and The Pensions Ombudsman last month to provide extra guidance for scheme members about the impact of the pandemic on pension pots.