Pension fraud and scams are not as rare as you might think. Surveys undertaken by the Financial Conduct Authority and Pensions Regulator suggest that as many as five million people living in Britain are at risk of falling prey to a pension scam. Other studies estimate that the cost of pension fraud in the UK could be in the region £6bn per year.
The scale of the problem is recognised by the industry and pension providers should be aware of their obligations to warn their members of the risks of scams when transferring their valuable pension benefits to a new scheme.
However, despite clear guidance from the Financial Conduct Authority, first introduced in 2013, we still see many cases where pension providers have allowed the transfer of safe and secure pension benefits into a scam without providing adequate warnings, undertaking due diligence and failing to engage with their members appropriately.
Take Mrs B, for example.
In July 2013 she was contacted, out of the blue, by a Mr Dean Lord who was working for a business known as Yardstick Marketing (“Yardstick”).
Yardstick made various representations about the performance of Mrs B’s pension which they were not authorised or regulated to do. They also persuaded Mrs B to transfer her final salary BT pension into what transpired to be a scam arrangement.
At the time of the transfer Yardstick was subject to a Financial Conduct Authority alert dated 23 August 2012, which stated;
‘This is a firm that we have been told is either operating regulated activities without the correct authorisation, or is running a scam. We strongly suggest you avoid dealing with unauthorised firms like this.’
Despite this clear warning a transfer request was subsequently authorised by the BT scheme and Mrs B’s BT pension transferred into Brookes Retirement Benefit Scheme on 25 September 2013.
Mrs B’s pension pot then disappeared and has not been traceable since.
In January 2019 we submitted a claim to BT on behalf of Mrs B alleging maladministration, failure to provide sufficient warnings on the risks and for failing to carry out appropriate due diligence into the receiving scheme and also into Yardstick.
The matter proceeded through BT’s internal dispute resolution procedure and thankfully before legal action was necessary BT conceded the claim in February 2020. BT accepted it had failed to carry out appropriate due diligence in respect of the transfer and agreed to re-instate Mrs B’s pension as well as pay her compensation for the distress and inconvenience caused.
If you think you may have transferred your pension into a scam or a pension that you are now unable to trace, Hugh James’ Financial Mis-Selling Team may be able to help you recover your money.
You may have a claim against your pension provider relating to a scam or fraud if you have experienced any of the following:-
- You were persuaded to transfer by an unregulated individual or firm
- You had no pressing need to transfer out or release cash.
- You were offered ‘cash back’ or to ‘unfreeze’ your pension.
- You transferred to a newly registered ‘occupational’ scheme but the scheme was not your actual employer or linked to it.
- You had no direct engagement by way of a letter, email or phone call from your pension provider regarding the transfer highlighting the risks of scams and pension liberation.
- You cannot now trace your pension.