Under the new plans, suspicious requests could be stopped if pensions savers have been approached to access their savings via social media
The UK government has announced new rules to tackle online pension scams. The Department for Work and Pensions (DWP) and Minister for Pensions Guy Opperman is helping shut the door on social media scammers trying to plunder people’s pensions under new scam prevention measures due this autumn.
Back in the summer of 2019 experts in the industry were warning the country could be on the cusp of the next big financial scandal after pension scams are costing the Brits up to £4 billion a year.
And only in May 2021, it was revealed by Action Fraud that £1.8m has been lost to pension fraud, in only the first 4 months of the year. Pre-pandemic it appeared that the number of pension scam reports was dropping, but in the first three months of 2021, there were reports of 107 pension frauds, a rise of 45% compared to the same time in 2020.
Now under the new government plans, suspicious requests could be stopped if pensions savers have been approached to access or transfer their savings uninvited via social media.
Such unsolicited contact would trigger a red flag which would mean pension trustees or scheme managers can block it.
Many scammers are using social media and other online channels to offer people “too good to be true” incentives such as free pension reviews, early access to their money, or time limited offers. Lured by these attractive offers, people are coerced into transferring their savings into a scam scheme designed to fleece them of their savings.
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, he said.
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.