MPs are lobbying the government to crack down on pension scams after a massive increase in the number of fraudsters trying to cheat unwary retirement savers out of their cash.
The House of Parliament Work and Pensions Committee claims the government is niot do enough to protect ordinary savers and investors from scams.
Chairman Labour MP Frank Field labelled the crooks action as a tragedy for consumers.
The committee scrutinises the work of the Department of Work and Pensions and has been hearing evidence about the increase in activity by fraudsters.
The City of London Police has reported scams have doubled since flexible pension benefits were introduced for the over 55s in April, with crooks netting £9 million from savers, compared with £4.5 million for the same period last year.
Pension liberation
The pension overhaul was in part designed to stop pension liberation, which involved scammers unlocking pensions on the promise of better investment returns or cash pay outs to retirement savers before they reached their pension age.
“These scammers are taking away consumer confidence in retirement advice from finance professionals and ordinary people do not know whether promises made to them are crooked or the right course of action,2 said a spokesman for the committee.
One sector pinpointed as a scam hotspot was Qualifying Recognised Overseas Pension Scheme (QROPS) .
Pension provider Aegon says unscrupulous, unregulated advisers are targetting expats overseas to transfer their pensions to QROPS as a front for charging sky-high fees and commissions.
Check IFA credentials
The firm also accused the bogus advisers of setting up fraudulent investment schemes to snare pension savers.
“This is only a small proportion of schemes, but the fact it is happening means expats need to make sure they are taking advice from a bona fide adviser and not a scammer,” said a spokesman.
QROPS advisers should be authorised in the country where they are advising on pensions and be qualified and licensed according to the terms and conditions set by the local financial regulator.
Expats in Thailand are lobbying for action after losing £22.5 million invested in QROPS as part of the LM Investment Management scandal.
Integrity, greed ? – there is no difference between an independent qualified financial advisor & a scammer. ‘Find ,fleece & forget’ is the motto of both. I’ve been scammed by a ‘pro’ Masters degree etc. but dishonest to the core. Deregulation !
HSBC send CV’s of dodgy financial people to Hong Kong i.e. those unable to work in UK due to ‘irregularities’ so left the UK to further ‘work’ with ex-pats & then after 3 years wanted to return to UK to be absorbed into ‘the system’ which originally banished them from ‘operating’. So HSBC circumvent/bypass other methods of control- so the rot continues until these people retire- on ring fenced pensions!