On Sunday, the UK government unveiled its latest set of plans to crack down on pension fraud, which included new rules on pension transfers and a ban on cold-calling, including unsolicited emails and texts. In a statement announcing the planned crack-down, pensions minister Guy Opperman referred to the “tough new measures” being brought in, saying they were being aimed squarely at “those who scam”.
Among those who were unimpressed by the proposed measures – and Opperman’s comments – was a pension scam victim from Milton Keynes. Below, the victim, who has requested anonymity but whom we shall call “Stephen”, explains, in his own words, why he thinks the government’s plans won’t work. (No date has yet been given for the proposed measures to be in place.)
The main problem with the measures being proposed by the government, under the recently-appointed pensions minister Guy Opperman, is that they naively target the wrong people. As a result, the measures will do little to deter those whom the authorities at least have managed to grasp are “unscrupulous pension scammers” who openly prey on people like me.
I was scammed in 2015 by an unregulated firm of advisers based in Europe, with offices in London. This lot were helped by a firm based in Manchester that provided some (not-inconsiderable) administrative support to complete all the necessary paperwork needed by my ceding (defined benefit) provider and the offshore pension scheme – as my adviser with the Europe-based firm, that had offices in London, had advised me to do.
(I can’t name this advisory firm, as they’ve threatened me with a lawsuit if I were to do so.)
On their (unregulated in the UK, I later learned) advice, I transferred my occupational pension to a Maltese pension scheme that was, and still is, registered with HM Revenue & Customs as a Recognised Overseas Pension Scheme (ROPS) and from there, again on their advice, had it invested into a couple of so-called offshore unregulated collective investment schemes (UCIS) even though – I now know – it is illegal to promote such schemes to the general public.
From what I’ve been able to glean from the “tough new measures” against pension scammers announced on Sunday, there doesn’t seem to be anything aimed at preventing the inclusion of offshore UCIS products in the pensions of people like me in the future.
As for the “ban on cold calling in relation to pensions”, this would not have prevented the scam that was done to me.
I engaged my (unregulated) adviser without being cold-called, finding him instead from an internet search.
What’s more, solicitors acting for the directors of one of the funds my pension money was transferred into have denied that this company engages in any cold-calling, explaining that it obtains business “through the purchase of leads through reputable providers, such as [name of a particular money-advice website here]”.
“This is a well-known and established practice that many businesses engage in,” the solicitors added in their letter, a copy of which I’ve shown to International Investment.
So while putting an end to cold-calling might stop other people from being scammed, it certainly would not have helped me.
Meanwhile, with respect to the matter of my being sold UCIS investments, Opperman – who spent 20 years as a barrister, and who correctly acknowledges the illegal activity that has been taking place under the government’s nose for years in this country – said in his statement on Sunday that “£43m has also been unlawfully obtained by scammers since April 2014 … with false promises of low-risk, high-return investment opportunities”, should, I would have thought, already be familiar with the current legislation (FSMA 2000) that already prohibits the promotion of Unregulated Collectives to the general public.
Not that the existence of legislation aimed at protecting victims like me turns out to matter much, I discovered, when I submitted a formal complaint to Action Fraud, the UK’s national fraud and cyber-crime reporting centre, in the hope they would investigate the way I was targeted on behalf of UCIS providers while sitting in the UK, by a director of an Eastern Europe-based firm.
In a letter dated 15th June 2017, Action Fraud told me: “We are sorry to hear you’ve been the victim of a crime …. I regret to inform you we have not identified any leads that would result in a successful criminal investigation … therefore your report has not been sent to a local police force … to commence an investigation”.
In coming to this conclusion, Action Fraud never contacted me for further information, even though I informed them, in their online complaint form, that I have a huge body of narrative to show them, with very compelling evidence of fraud.
They don’t provide you with a facility to send them the evidence, and then don’t ask for it; and then, at least in my case, say they cannot help because they have insufficient evidence to launch an investigation.
It is hardly surprising, then, that, when I warned another director of the Europe-based advisory firm with offices in London that I was planning to report his organisation to Action Fraud, he replied, in an email: “All is fine, Action Fraud are nobody, and have no authority”.
Cutting to the chase, what I didn’t see in the “tough new measures to protect savers from pension scams” unveiled on Sunday was any mention of plans to get tough with unregulated advisers promoting unregulated collective investments to the general public, even though legislation is already in place to do so, and even would require no implementation date to be set.
(The lack of any mention of a date for the proposed crackdown to be brought into force has been commented on by a number of market observers, including Sir Steve Webb, the former pensions minister and now policy director at Royal London.)
The way I see it, if the UK government were actually to get seriously tough with unregulated advisers like the one who preyed on me, who make fraudulent promises and illegally promote unregulated collectives – rather than a properly diversified collection of blue chip investments, as all pensioners ought to have in their portfolios – the conveyor belt of pension transfers might just come to an end, or at least slow down.
Because as it stands now, these “unscrupulous scammers”, as Opperman describes them, don’t currently fear retribution from the authorities, and are probably still chuckling, even now, at the lack of teeth contained in the just-announced crackdown on pension scammers.
Editor’s note: “Stephen” reports that, thanks to his own efforts as well as those of a number of industry figures, including Pension Life’s Angie Brooks, he has been able to recover around 92% of his original pension, which is now back in the UK. In addition to his loss of around 8%, plus “thousands of pounds” in costs associated with the repatriation, he figures he lost whatever interest and capital growth his pension assets might have accrued during the time they were managed by his Europe-based adviser “with offices in London”. He says he is continuing to fight to recover his remaining pension, and also because he believes that he has a duty to warn others against the risks posed by this and other similar scams.
“Instead of being grateful he only lost 8% of his pension to the scammers, and going away quietly to lick his wounds, he is fighting harder than ever to get the rest back, and to help warn and protect the public against this scam, which is still ongoing,” Pension Life’s Brooks said.