It is very pleasing to see that the government’s DWP (Department for Work and Pensions) has launched a consultation with the aim to strengthen protections against scams for its members, where unsolicited contact is received through social media. The government is very concerned that more scammers are using these online channels to tempt people with “too good to be true” figures, free pension reviews, early access to their money and time-limited offers.
In initial draft pension transfer regulations, it is looking to introduce amber and red flags, which would be triggered when either one, multiple or a set of specific circumstances take place within a transfer request.
Red flags would give pension trustees or their scheme providers the ability to block a pension transfer, while an amber flag would allow the transfer to be paused until the member can give evidence that they have undertaken scams guidance.
Information requests will include asking members a set range of predetermined questions around who contacted them and how they were contacted, whether they fully know how their money will be invested, and what the ongoing costs and charges are. They will be particularly looking at where this contact has come via social media sites such as Twitter and Facebook etc.
Pensions and financial inclusion minister Gary Upperman stated: “Pension scammers really are the lowest of the low, and with the continued growth in recent years of online scams we absolutely must act now to curb them.
“Our new set of regulations will build a strong, defensive first line in the ongoing fight against pension fraud – helping to stop these dreadful crooks from taking off with people’s hard-earned life savings.”
The Pensions Regulator (TPR) warmly welcomed the new proposed rules, with executive director of frontline regulation Nicky Partish saying they would give an “additional layer of scam protection”.
Whilst these extra safety checks may delay the transfer process, surely it is far better to be safe than sorry? Financial advisors near me say Scammers continue to get away with millions of pounds each year and we are continually committed to ending the rise of the scammers and are more than happy to do our bit to help protect consumers and encourage transparency.