The Pensions Regulatory Authority (TPR) has launched a new anti-fraud strategy amid fears the cost-of-living crisis could make savers more vulnerable to scammers.
Amid the rising cost of living and pressures from Covid-19, TPR warned that savers could be lured by offers to access their retirement savings early to cover important household bills, or lured by bogus investments that offer high returns that never materialize come.
Under the plan, TPR aims to educate the industry and savers about the threat of fraud, prevent practices that can hurt savers’ retirement outcomes, and fight fraud through the prevention, disruption and punishment of criminals.
The new strategy was validated following a joint pension fraud threat assessment conducted by TPR and the National Fraud Intelligence Bureau, which found that the threat to pension savings has continued to diversify, both in terms of the overarching methods used to access them is used and the specific tactics used.
The regulator said it looks primarily, but not exclusively, at seven types of pension fraud, which are often seen in combination.
These include investment fraud, pension waivers, fraudulent pension schemes and providers, clone companies, claims adjustment firms, employer-related investment (ERI) violations, and high fees often masked by “unnecessarily complex business structures.”
As part of its anti-fraud strategy, TPR has also committed to working to improve intelligence coordination between anti-fraud partners to better disrupt and prevent fraud and fraud and bring fraudsters to justice.
In fact, the strategy is intended to complement the work of Project Bloom, which is to be renamed the Pension Scams Action Group, as previously recommended by the Work and Pensions Committee.
In addition, TPR has committed to annually or biennially developing a Pension Scams Action Group Strategic Threat Assessment and to consider establishing a dedicated Pension Scams Action Group Fraud Center to coordinate intelligence information.
The regulator also announced that it would look into opening a “regulatory sandbox” to allow industry to test fraud prevention and intelligence gathering solutions in partnership with other relevant regulators.
In parallel, a review of the Member Communication Guidelines for Fraud Prevention Messages is being conducted to help improve the pension customer experience.
The strategy builds on TPR’s pledge to fight the anti-pension fraud campaign, which has been supported by more than 500 organizations, with an estimated 16 million pension pots now better protected thanks to the campaign, according to the regulator.
Commenting on the plans, Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “Our new anti-fraud plan aims to make savers aware of the risk of fraud, encourage systems to adopt higher standards of protection for saver pots and the intelligence needed we work with others to prosecute and punish criminals.
“But this task is not ours alone. We expect the industry to lead the way in thinking about innovative ways to protect savers now and in the future.”