By Victoria Mckeown-
The government has introduced plans to combat online scammers which have been on the rise lately. Scammers have been targeting pensioners and luring savers into the lions den with “too good to be true” incentives.
The plans are aimed at stopping any suspicious requests through a “red flag” system in situations where savers have been contacted through social media platforms to access the savings.
Part of the plans are to introduce “red flags” and “amber flags” are triggered when one, or a combination, of a specific set of circumstances are present and indicate fraudulent activity.
Under new guidance by the government, a red flag will give the trustee the power to block the transfer, while an amber flag allows them to block the transfer until the member provides evidence they have taken specific transfer scams guidance.
Minister for Pensions Guy Opperman said:
”Pension scammers are the lowest of the low, and with the growth in recent years of online scams we must act now to curb them.
Our new regulations will build a strong, first line of defence in the fight against pension fraud – helping stop these crooks from making off with people’s hard-earned savings.
Most pension transfers are legitimate and can proceed with minimum intervention. However, the Pension Scams Industry Group estimates five percent of all transfer requests give trustees and scheme managers cause for concern.
The pension transfer regulations – published on GOV.UK for consultation today – will introduce a new red and amber flag system.
A survey conducted by YouGov last year indicated that pension savers in the UK may have been scammed by an astounding £14billion.
Criminals now want to take advantage of the fact that people over 55 have greater access to their pension funds. Victims of these scams usually are contacted through social media “incentives” such as offering *loans” from pensions or recommending tax loopholes.
Phil Brown, director of policy at The People’s Pension, said: “It’s deeply concerning that as many as 240,610 savers might have lost some or all of their hard-earned pension savings.
Our estimate for the number of victims suggests that some of the figures currently put forward for losses to pension fraud are underestimates. While £14.6 billion is a large number, fraudsters will only want more and with £2.5 trillion of pension savings potentially accessible to criminals, there is plenty for them to target.
“This is a crime which causes untold misery and has the potential to wreck lives, which is why it’s vital that there is a joined-up approach to tackling this very serious problem. We want to see a broader definition of pension fraud to ensure that crime data provides an accurate picture, the establishment of a central intelligence database, not to mention more support for victims.