Asked by: Virendra Sharma (Labour - Ealing, Southall)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of trends in the number of pension scams and fraud in each quarter of the last five years.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Government is committed to protecting people from pension scams and fraud.
The quarterly data on pension scams and fraud does not exist.
Pensioners who suspect they have been a victim of a pension scam or fraud can report to Action Fraud, the national reporting centre for fraud and cyber-crime. The DWP works with Action Fraud and other members of the police led organisation Project Bloom, which is cross-government and works with industry to monitor and respond to pension frauds, update prevention and respond to these changes.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential increase in pension scams since the start of covid-19 outbreak.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
To assess and respond to the impacts of Covid-19 on the pension industry and pension savers, DWP has established a cross-government and regulator group and has been working with the pension industry to understand emerging impacts.
This group is informed by a separate data monitoring group that co-ordinates the aggregation of data from a range of sources, including government, regulators and pension industry bodies, to identify trends including any increase in pension scams activity.
Data received so far has revealed little evidence of an increase, however it may take time for impacts to materialise. We will of course continue to monitor the situation to assess if there has been any increase in pension scams activity as a result of the crisis.
The PPF, in collaboration with regulators and pensions bodies, recently published a guide,’COVID-19 and your pension: where to get help’, which answers common pension concerns and helps individuals find the right support. This includes guidance for individuals who are concerned about pension scams.
https://www.ppf.co.uk/covid-19-pensions
Asked by: Nick Smith (Labour - Blaenau Gwent)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to introduce penalties in respect of negligent independent financial advice on transferring pensions.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government works closely with the Financial Conduct Authority (FCA), the independent financial services regulator, to ensure that the market for pensions advice works fairly.
The FCA already has considerable powers to take enforcement action where consumers are harmed by poor financial advice and where an FCA authorised firm has breached FCA rules. The FCA has the power to impose a range of sanctions, including fines on firms or individuals, requirements to carry out redress exercises, and bans on firms or individuals. There are currently no plans to introduce further penalties in respect of negligent pensions transfer advice.
If the FCA suspects that criminal fraud has been committed, the FCA will refer the case to the relevant authorities for further action to be taken. The FCA can also take action through the courts against firms or individuals who carry out regulated activity without authorisation.
The FCA have recently consulted on a number of interventions in the Defined Benefit (DB) pensions transfer market to reduce the number of consumers transferring their pensions when it is not in their best interests. The FCA are in the process of considering the feedback they have received and plan to publish a Policy Statement on the outcome in the first quarter of 2020.
In addition, the Department for Work and Pensions are introducing legislation, through the Pension Schemes 2019-20 Bill, to allow regulations to be made to stipulate the destinations and circumstances under which a pension scheme member will have a right to transfer their pension savings to another pension scheme. This will further protect members from pension scams by helping trustees of occupational pension schemes ensure transfers are made to safe and not fraudulent schemes.
Asked by: Faisal Rashid (Labour - Warrington South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to (a) prevent pension phone scams and (b) bring people who undertake pension phone scams to justice.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to protecting people from pension scams, and pursuing those who perpetrate pension scams wherever possible. That is why the government established Project Bloom, a joint taskforce between government, regulators and law enforcement to share intelligence, raise awareness of scams through communications campaigns, and take enforcement action when appropriate.
Regulations to ban pensions cold calling came into force in early January 2019, using the Privacy and Electronic Communications Regulations 2003 (PECR) as a legal framework. Firms who break the rules could face penalties of up to half a million pounds. As well as deterring cold callers by making their activities illegal, the cold calling ban makes it clear to the public that any pensions cold call they receive is illegal and likely to be a scam call.
The Government also recently amended PECR to allow fines on individual directors who consent to or connive in or neglect to prevent serious contraventions of PECR by their organisation(s). The new measure came into force in December 2018. This measure gives the Information Commissioner the power to impose civil monetary penalties of up to £500,000 on those in positions of responsibility in all forms of corporate entities.
In addition, the Government has recently provided the National Trading Standards Scams team up to £640,000 for the roll out of call blocking devices, free of charge, to vulnerable people, including old aged pensioners. The National Trading Standards launched this project on 15 October of this year.
Asked by: Andrew Percy (Conservative - Brigg and Goole)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what steps she is taking to raise awareness of telephone scams that target elderly people.
Answered by Brandon Lewis
Since September 2016, the Government has been running the Take Five fraud awareness campaign designed to urge the public and businesses to take time to consider whether a situation they find themselves in is genuine. The campaign equips the public to more confidently challenge fraudulent approaches – be they face-to-face, on the telephone or online. Specific advice on phone scams and vishing can be found at www.takefive-stopfraud.org.uk.
The Take Five campaign has been jointly led by HMG and UK Finance and involved influential public, private and third sector partners, including Age UK, National Trading Standards (Friends Against Scams initiative), Neighbourhood Watch, banks and law enforcement to deliver protective messages to people who are most vulnerable to fraud, including the elderly. The campaign has been run nationally across digital and social media, radio and video on demand platforms, and included media partnerships with publications such as Women’s Weekly, Ideal Home and Take a Break and presenter-led spots on radio stations like LBC and Heart, seeking to embed behavioural change amongst the target audience.
In addition to this campaign activity, the Government continues to work on practical solutions to address nuisance and scam calls. DCMS secured over £600k in the Autumn Budget to provide vulnerable people with call blocking devices. This was in addition to £500K secured for the same purpose in the previous spending review period. This funding has helped to protect some of the most vulnerable in society from nuisance calls and scams, including those originating from overseas. The Government has also taken action to ban pensions cold calling, recognising that it is the most common method used to initiate pension fraud, which can leave people facing retirement with a greatly reduced income
Asked by: Paul Farrelly (Labour - Newcastle-under-Lyme)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, with reference to the Association of British Insurer's report: Principles for tailoring retirement risk warnings, published in May 2019, what assessment she has made of the potential merits of ensuring that age-appropriate warnings are provided when information is given on (a) pension scams, (b) employer contributions in relation to pensions, (c) tax matters in relation to pensions, (c) life expectancy in relation to financial planning and (d) lasting power of attorney in relation to financial and health matters.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Department for Work and Pensions has engaged with the Financial Conduct Authority on their proposals to improve the information received by pension scheme members. The department is working with the Pension Regulator as to how best to introduce equivalent measures for occupational pension schemes and will also seek to involve industry stakeholders such as the Association of British Insurers in this work.
The Government considers that providing people with the right information at the right time can be key in helping them make more effective decisions about their pension savings. It is sensible to tailor communications to people’s circumstances. There will be some differences in the information someone in work would find more helpful than someone aged 75 or over who is already retired. It is important, however, that all savers are alerted to the risks posed by pension scams and we welcome the inclusion of that messaging in the approach proposed by the Association of British Insurers.
Asked by: David Drew (Labour (Co-op) - Stroud)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Government plans to introduce measures to require banks to reimburse people who have been misled by fraudulent investment schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government takes the issue of investment fraud very seriously and is committed to protecting people and pursuing those who perpetuate scams wherever possible. In the area of pension scams in particular, the Government introduced regulations to ban pensions cold calling which came into force in early January 2019. Firms who break the rules could face penalties of up to half a million pounds.
If fraudulent investments were recommended by an authorised financial advisor, the consumer can seek redress by the advisor’s firm by bringing the case to the Financial Ombudsman Service (FOS).
In the event that the authorised financial adviser is responsible or a UK authorised collective investment scheme fails, consumers also have access to Financial Services Compensation Scheme protection. The FSCS provides compensation to customers of financial services firms that have failed. Since 2011 the FSCS has paid over £60 million to claimants.
Asked by: Philippa Whitford (Scottish National Party - Central Ayrshire)
Question to the Department for Digital, Culture, Media & Sport:
To ask the Secretary of State for Digital, Culture, Media and Sport, what steps the Government has taken to reduce the use of cold calling to obtain contractual agreements with pensioners.
Answered by Margot James
Pension scams can have significant and devastating impacts on people’s lives. Scams can leave people to face retirement with a greatly reduced income, unable to build their pension savings back up. As well as being a nuisance, cold calling is the most common method used to initiate pension fraud. This is why the Government has taken a number of measures to tackle nuisance calls in general and ban pensions cold calling in particular.
On Monday 17 December new powers enabling company directors to be held personally liable for the nuisance calls their company makes came into force.
The Government ran a technical consultation over the summer on regulations to ban pensions cold calling and published the consultation response as a supplementary document to Budget 2018. The regulations to ban pensions cold calling were laid in Parliament on 1 November and will come into force early in the new year.
However, the Government is aware that more needs to be done to truly eradicate this problem, and continues to work with regulators and industry to put a stop to these calls.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the Department for Work and Pensions:
To ask Secretary of State for Work and Pensions with reference to the Answer of 19 October 2015 to Question 10807, how many free guidance sessions with Pension Wise have been held for those with defined contribution pensions in each year since October 2015; and what estimate his Department has made of the number of such sessions which will be held in 2018.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The number of Pension Wise website visits and appointments has grown significantly from a standing start when the service launched in April 2015, and is still rising.
Pension Wise delivered 61,000 face to face and telephone appointments in 2015/16, 66,000 in 2016/17 and is on track to deliver more than 80,000 in 2017/18.
There have been around 6.2 million visits to the pension wise website since launch.
In July 2017 Pension Wise introduced digital appointments, which guide users through their pension options, scams and tax implications online. Digital appointments mirror the content provided in a face to face or telephone appointment. So far, Pension Wise has delivered almost 22,000 digital appointments.
Asked by: Alex Cunningham (Labour - Stockton North)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 11 October 2017 to Question 106439, on pensions, other than Master Trusts, if the Government will establish an approved list of regulated pension schemes with regulated underlying investments that are deemed safe; and if he will make a statement.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
It is not the Government’s role to determine whether the individual underlying investments of pension schemes are safe or not. The Government has, however, legislated to require trustees or managers of occupational pension schemes to ensure the quality and security of their scheme’s investment portfolio. This includes ensuring that scheme assets are predominantly invested in investments admitted to regulated markets.
Pension providers of workplace personal pensions need to be authorised by the Financial Conduct Authority (FCA) in order to carry out this activity. The FCA is also responsible for the regulation of the investment market and financial advisers. FCA already holds a register of firms that are or have been regulated by them or the Prudential Regulation Authority. The register is open to the public. FCA also produces a warning list that the public, including trustees, can use to check an investment or pension opportunity to avoid scams.