Many pension scammers ‘slipping through the net’
Only around two pension fraud cases per month were passed to police forces to investigate last year typically, despite nearly 400 reports being made to Action Fraud, figures show.
Wealth management business Quilter said that for many pension scam cases, the chances of reaching a successful criminal justice outcome appear to be slim.
Figures obtained by Quilter under a freedom of information (FOI) request show that 394 pension fraud reports were received by national crime fighting body Action Fraud in 2019.
During the same period, 26 pension fraud reports, or just over two a month on average, were passed on to police and other agencies.
Quilter said that pension scams are extremely complex, require considerable police resources to investigate, and in many cases are only discovered years after the event. This means it can take years of information gathering before police can get to the point of prosecution.
The same figures collected by Quilter show that up to July 2020, 161 pension fraud reports have been received by Action Fraud, while 24 have been disseminated to the relevant police force so far this year for investigation.
Jon Greer, head of retirement policy at Quilter said: “We are entering a period of considerable economic uncertainty, and one in which generating a decent return on your investments will be extremely challenging. This is the ideal environment for scammers to thrive and it is no surprise to see huge amounts of money still being lost each year at the hands of criminals.”
He continued: “Pension scams and other investment frauds are extremely complex, they can span multiple jurisdictions, and can often go uncovered for years before the victim realises their money is gone. This all makes investigating the scams incredibly time consuming and expensive, which is why the police have to prioritise those few cases where they have a chance of success.
“The legal deterrent appears to be ineffective, so more must be done to prevent scammers from operating, and to do this we must cut the line of communication between the scammers and their victims: search engines and social media.
“The Government have taken action on unsolicited pension calls with the ban on cold calling, but scammers are sidestepping the legislation and moving online. Movement on the regulation of search engines and social media platforms has been painfully slow and the regulation has failed to keep up with the evolution of scammers.”
He said that the Online Harms Bill could be used to clamp down on the issue.
A statement from Action Fraud, said: “Although pension scams are not a common type of fraud, they can be devastating for the victims who may lose a lifetime’s savings in a matter of moments.
“Whilst enforcement is key in the police’s response to pension fraud, stopping people becoming victims in the first place is just as important. We work hard to raise awareness of fraud types where we see emerging trends and we encourage people to follow advice in rejecting unsolicited approaches about the use of pensions, to take time to think carefully about any proposals, and to ask friends and family for their advice.
“We would encourage anyone who has been a victim of a pension scam to report it to Action Fraud. Every report matters and helps in building a bigger picture and preventing further victims.”