The best scam prevention? Listen to the victims
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
We recently received a message from someone who had sadly invested in a storage firm which is now in receivership, and which is notorious among industry professionals for all the wrong reasons.
Pension scams destroy lives, we hear again and again. Yet at the moment, there are no specific support networks for victims of pension scams.
For people finding they have been robbed of a large sum – sometimes the bulk of assets accumulated over a working life – at a single stroke must cause incredible anguish, outrage and fear for the future. Often it affects people’s mental health, and shockingly, there are even reports of suicides.
It is astonishing that people who have had their pensions stolen do not seem to have a voice in the industry – once a case is with the police, it is out of sight. Only now, slowly, consensus is building that victims deserve to be heard: a group of politicians are setting up an all-party parliamentary group around scam victim support, which will hopefully help to create more specific helplines and networks.
What is more problematic is that some victims feel that someone should reimburse them, or that more should be done to track down fraudsters and any remaining assets.
There is a difficult line around where personal responsibility begins; and the fact that the courts and the ombudsman seem to have differing views about this is less than helpful.
While in Hughes v Royal London, the individual’s choice trumped the security of the pension, in another recent decision, the Pensions Ombudsman upheld a complaint partly because, he said, the pension fund should have worked out that the victim was “not financially aware” - the pension scheme was held responsible for the member’s decision.
While in Hughes v Royal London, the individual’s choice trumped the security of the pension, in another recent decision, the Pensions Ombudsman upheld a complaint partly because, he said, the pension fund should have worked out that the victim was “not financially aware” - the pension scheme was held responsible for the member’s decision.
Some have bitterly pointed out that in comparison to pension schemes, HMRC, which previously registered many fraudulent pension schemes thus making them appear trustworthy, has never had to justify its actions in a court.
So when should an institution held responsible for our money decisions?
Lawyers would say it all depends on the wording of the law, but there could just be a common sense answer.
I once gave £5 to a youngster who said he was collecting for a football team. Later, I discovered that it was a known fraud – he had lied to my face. While it wouldn’t occur to me to blame anyone but myself in this case, would I feel the same if it had happened to my life savings? I’m not so sure. That’s because while the state might not care if I’m a fiver worse off, it should absolutely have an interest in whether I have retirement savings – or not, in which case I would need its support.
And it should not stop at the prevention of fraud but go beyond it to those who have already lost their money. It seems the best people to warn others about a crime are those who have already been its victims and can describe best how quickly it can happen, and just how devastating it is.
