By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 18 January 2021
It stems from the day the world’s oldest mutual insurer revealed a black hole in its accounts, as a result of which, more than a million ordinary folk lost £4billion in savings. According to victims’ group campaigners 95% of them have since got back only 22% of the money they lost. That campaign for redress again ramped up in December, with calls backed by MPs for a further £2.6 billion in compensation.
In 2008, MPs in Westminster’s Public Administration Committee penned a paper about the Equitable Life scandal titled ‘Justice Delayed’. They observed at the time that many of the victims “are no longer alive, and will be unable to benefit personally from any compensation. We share both a deep sense of frustration and continuing outrage that the situation has remained unresolved for so long.”
Gallingly, that is now more than twelve years ago. The Parliamentary Ombudsman’s report on the scandal in 2008 concluded that there had been ‘a decade of regulatory failure’ and that the members of Equitable Life were seriously let down by the Financial Services Authority and Government bodies. The Government then agreed to compensate victims. Subjects covered by MPs at the time included ‘Lessons for the Future’ and ‘Who watches the watchmen’? Those conclusions bear revisiting today.
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 12 January 2021
Fraudsters are exploiting the tools of unregulated online advertising in lockdown, prompting a call for increased powers to tackle the scourge. A City of London police commander last week explained to MPs why in his view, the police can’t simply ‘arrest ourselves out of’ the UK’s most common crime. It happens so often, and is difficult to trace: “Traditionally there has been an emphasis on reducing criminals,” said Commander Clinton Blackburn of City of London Police. “Preventing people from becoming a victim in the first place is an absolutely vital part of addressing fraud.”
822,000 reports of fraud
Commander Blackburn made the remarks at the latest hearing of the Pension Scams inquiry, a probe that Transparency Task Force campaigned for. You can see a full transcript of the session here and catch up with victims’ testimony here. Last week’s session heard from police and regulators. Blackburn set out that there were around 822,000 reports of fraud in the last financial year in the UK, including ‘nearly 19,000 investment frauds reported to Action Fraud’ in 2020: “We are talking about huge volumes here. Policing has limited resources and competing demands and, sadly, we have to make some very difficult decisions as a result. I do not believe this is an area of crime where we can arrest ourselves out of this offence type.”
As 2020 neared its close, police for Interpol arrested ferrari-driving millionaire Anthony Armstrong-Emery in the United Arab Emirates. His purported Brazilian social housing scheme, EcoHouse, cost most investors more than £20,000 each in savings. Investors first started raising concerns around 2013.
EcoHouse was promoted by British solicitors (one of them since struck-off) and has caused losses around the world. Yesterday, one of the victims of the scam told TTF that he has just surveyed the experiences of more than 60 others regarding the Met Police’s handling of their cases. They have heard so little positive news that they feel as if ‘the case investigation & prosecution has inexplicably disappeared, like a ship in the Bermuda Triangle’. Tantalising evidence on where victims’ money went has dangled just out of reach since 2017, apparently in the hands of the Met Police, with victims now beyond desperate for disclosure.
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 21 December 2020
Reports on regulatory failure in the Connaught and London Capital & Finance scandals – which collectively lost consumers hundreds of £millions in hard-earned savings – were published last week with damning effect on the UK’s leading City watchdog the Financial Conduct Authority. Transparency Task Force is brainstorming for a White Paper on how the FCA could be fixed, as former watchdog chiefs face press ridicule for both ignoring tip-offs on scandals and trying to use ‘Maxwellisation’ – legal attempts to challenge what is said about them – to mute personal criticism after the fact.
‘Huge learning opportunity’ in the legacy of Australia’s Royal Commission
Given the persistent furore around financial regulation in the UK, TTF’s founder Andy Agathangelou had a ‘spookily timed conversation’ last week with Dr Andy Schmulow, an Australian expert in the ‘twin peaks’ model of financial services regulation – where financial stability is regulated separately to the City.
Agathangelou felt after the conversation as if a flashlight had been handed to him in the dark: “I have had hundreds of great conversations with people this year, and I think that the conversation we just had is right up there as one of the most significant of all of them.” He explained, pointing up that “Australia has gone through a very very interesting time recently and we are absolutely convinced that there is a huge learning opportunity.”
Blistering victim testimony on the impact of investment fraud and regulatory failure in the UK, was last week given to MPs on Parliament’s Pension Scams Inquiry, a probe TTF campaigned for. You can watch the session here.
Ark Scheme victim Susan Flood, who together with her partner was scammed of approximately £250,000, told MPs that ‘systemic failures’ in the UK are “top-down from the majority of the regulatory bodies.” She said this applies to “HMRC, Companies House, FCA, PRA, TPR and SFO – that includes Action Fraud. … What happened to my partner and I pretty much ruined our family life and resulted in financial harm to us all. We’re still fighting for the return of our savings ten years on.”
MPs heard that despite being advised by regulated experts, and employing lawyers in response to red flags just weeks after the transfer, Flood and her partner have yet to find any redress: instead, they have a monstrous tax bill on the ‘proceeds of crime’. She told MPs: “We were lied to throughout the process. … We found ourselves in an Ark scheme, which meant that our life savings were actually put into a fraudulent land valuation and other unregulated investments. We [had] believed we were getting a low risk pension scheme.”
HMRC under pressure
Flood and her partner are facing 55% unauthorised charges from HMRC on the approximate £250,000 scammed from them – with the interest going up on that amount over the years.
Being hounded for tax on their losses is a common, harrowing experience for scam victims. The second witness at last week’s session was Dennis Waite, who lost, in a different HMRC-registered scheme, a £108,000 Royal Mail pension he had spent 21 years accruing. He told MPs that he is also facing a tax bill – of 40%- on the proceeds of that crime.
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 30 November 2020
One of the devastating features of investment scams is that they tend to appeal to their victims’ social conscience.
“They’ll have some renewable energy plant in some third world country that will benefit from your investment,” explained pensions expert Lesley Carline, at a TTF Symposium last week.
Scammers often speak to victims like a friend, in a manner that true professionals cannot emulate. Carline compares their bluster to that of Donald Trump: “When pensions people are talking to members about their retirement options we use very complicated words and we are hamstrung by regulation about what we can and can’t say. If you listen to Donald Trump, he used soundbites, he says what you want to hear, he used short sentences and simple words. You may think the guy’s a plonker but he’s very effective. So is your scammer. They research you, they’re friendly, they’re approachable, it always seems to be quite timely when they contact you.”
“Ecohouse” transparency gap?
As TTF’s head of investigative journalism I took a call last week from an investor who was motivated by this kind of ‘social good’ messaging. He’d put savings into a “social housing scheme supposedly affiliated with the Brazilian Government”
It was called Ecohouse, a scheme that was suspended six years ago, and has since been deemed a fraud by Brazilian authorities.
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 23 November 2020
In the countries worst hit by the global pandemic, governments will have to grapple with the impact of Covid 19 pandemic on people’s jobs and security.
The U.S. today hit a one-day record of more than 192,000 Covid cases and the Sun recently reported that ‘TENS of millions of Americans will lose their unemployment benefits next month when Cares Act provisions expire, – unless lawmakers can agree on another coronavirus relief package.’
On Wednesday, Professor Steve Keen, the author of Debunking Economics, will be discussing this crisis with TTF members. Keen sees that private debt and unemployment have a correlation so ‘staggering’ that when you put it on a graph it looks like a Rorschach Blot. This has been ignored for far too long.
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 16 November 2020
The overwhelming need for change in financial services is not discussed as often as it ought to be. Since the year 2000, the U.S. financial services industry has paid out $325,206,110,617 in fines for legal violations. In the field of climate breakdown the situation looks, if anything, even worse as NGOs report big banks’ support for the fossil fuel industry has increased every year since the Paris Agreement was signed, with $2.7 trillion in investment in fossil fuels from some of the world’s biggest banks since 2016.
That mismatch between profit, value and indeed survival is globally evident. Despite this, it can still be a lonely task for financial services leaders to effect change for the better.
Transparency Task Force is publishing a series of video interviews with ethical financial services leaders – thankfully, a growing group of influential people. I’m featuring a couple of them here, as TTF is building an international league for ethical business leaders in the financial services space.
UK Financial Ombudsman - complainants are waiting 'too long'
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 09 November 2020
The UK’s financial ombudsman Caroline Wyman will take questions from MPs this afternoon, after the FOS’s annual report admitted that ‘at the end of the [financial] year, many people were still waiting too long for our help’, and “levels of satisfaction with our service, which are influenced by waiting times, have and will continue to come under pressure.”
The Ombudsman service does not appear to regularly report on its case-handling backlog, although it frequently states its target to handle all cases within eight weeks
By Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 02 November 2020
We will be running a ‘no-holds-barred’ Symposium on Wednesday evening on what high profile critics see as the many failings and flaws within the UK’s financial services regulatory framework.
Meanwhile the new chief of the Financial Conduct Authority, Nikhil Rathi, is appearing in front of MPs for the first time since he began his tenure at the watchdog. On Wednesday afternoon he will be accompanied in front of the Treasury Committee by Charles Randell, who chairs the FCA.
Questions for FCA chiefs from victim of fund collapse
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 26 October 2020
Last February a coalition of lawmakers in the All Party Parliamentary Group on Fair Business Banking gave their support to a group of people in the UK alleging that high street banks had forged customer signatures on documents.
The APPG observed at the time that: ‘In the USA, all 50 State Attorney Generals have already investigated the industrial-scale forgery of bank signatures on court documents in cases against customers.
‘The investigation resulted in penalty payments by US banks of $25 billion and the review of 4 million court cases by banks against customers. … In Australia, the Royal Commission documented evidence of signature forgery at Commonwealth Financial Planning, ANZ Bank, Commonwealth Bank of Australia and Bendigo Bank. The interim report also documented practices at the NAB, whereby individuals would sign as a witness to a client’s signature without having actually seen the client sign.’
‘We hope that with the Bank Signature Forgery Campaign, a similar body of evidence can be produced in the UK.’
Since then, the Campaign has provided the chief of the National Crime Agency, Lynne Owens, with more than 360 crime reports and 19 files of documents.
Whistleblowers speak out in new documentary short
Some key allegations brought to the campaign have been neatly summarised in a short film presented by Nicholas Wilson, a former banking whistleblower who is distributing the video online. His film features, among other figures, Steve Middleton a consultant who has worked with banking whistleblowers, alleging some of them were taught to forge signatures during their training: “They were taught it was the right thing to do, that it was in the customers’ interests…” he says.
Another key allegation was previously covered by investigative journalist Ian Fraser in his book Shredded: Inside RBS — the ‘common joke’ at Broadland Business Park that “all the best business was done at the photocopier”. The whistleblower Mark Wright – interviewed by the BBC here – goes on to tell Wilson that he alerted Andrew Bailey, then head of the FCA, to the name of an alleged trainer in signature forgeries.
The renewed focus on this subject is helping to bolster calls for a real inquiry on the impact of alleged financial services misconduct in the UK, perhaps akin to Australia’s Royal Commission. There is an air of Groundhog Day to this coverage, however, because we heard the same united call from campaigners last February. Investigations by law enforcement are by their nature secretive, and they have to be.
Mel Stride urging an update from Enforcement Agencies
Complainants’ frustration not to see enforcement action on bank signature forgery claims – or at the very least a public reckoning brought by politicians – is understandable. This is particularly in light of Andy Verity’s recent BBC report – in September – that no complainants had yet been contacted by the National Crime Agency. What is going on? The House of Commons’ Treasury Committee of MPs, chaired by Mel Stride, has been pushing for an update.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 19 October 2020
In the United States, a law to register financial investments came into force after the Wall Street Crash, with the Securities Act of 1933. The same never happened in the UK. Is it time for a change?
When Andy Agathangelou gave evidence to MPs’ inquiry on pension scams, the Work and Pensions Select Committee asked witnesses to write to them with any further thoughts on regulation. One idea that was discussed in evidence was to use a system of blacklists or whitelists to identify unregulated products. We are writing to the Committee on this, following the TTF’s ‘Joint Task Force’ proposal which is now published on the Committee’s website.
How does an S.E.C. type model of financial accountability work for the United States? Data on the US Violation Tracker project shows that recidivism, where financial misconduct repeats again and again, is a multi-$billion phenomenon there. But from the perspective of Mark Taber and other financial experts grappling with our system of regulation, the US system of knowledge-gathering, at least when it comes to a formal register of financial investment promotions, is many steps ahead of the UK and can disincentivise crooks.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 12 October 2020
Lawmakers are under pressure to close a shocking loophole that prevents the pensions industry from blocking the theft of pensions by transfer fraudsters. Recent research by Aviva indicates that, while this makes up only about 5% of reported frauds that target savers, the average sum lost to a transfer fraud is a devastating £70,000.
Stephen Timms MP, Chair of the Work and Pensions Select Committee, spoke up in a reading of the Pensions Bill last Wednesday, recounting evidence that he received in the pension scams inquiry, which Transparency Task Force helped to bring about in our campaign earlier this year.
Timms said: “We heard this morning from scheme trustees not only that they had an obligation to transfer even if they knew perfectly well that the destination was a scam but that if they did not do it quickly enough they would be fined for not getting a move on”
Timms said that the pensions ombudsman had tried to protect consumers in 2015, when it ‘allowed trustees to decline a transfer request when there were concerns about a scam‘ but perversely, this due diligence was then apparently strait-jacketed under the law: “The Hughes v. Royal Londoncourt case in 2016 overturned that determination. That must be changed … It is important that that change is made.”
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 05 October 2020
Violation Tracker (VT) is a powerful tool in the United States to keep tabs on all fines across all industries. Transparency Task Force is launching a campaign to bring it to the United Kingdom.
Using the existing database, for the United States, you can see, for example:
- that fines for financial offenses since the year 2000 have totalled $305,457,241,721, and that JP Morgan Chase tops that list.
- that there have been just over $96billion of fines in the United States for environmental offenses largely to oil companies, with BP, British Petroleum, having paid-out the most, $27,827,796,980 covering 142 separate violations over the last twenty years.
- that Wells Fargo topped VT’s bill in fines for ‘fraud’ due to $3billion levied on the bank in a single penalty this year.
- that Facebook tops VT’s bill for consumer-protection-related offenses paying $5,002,450,000 in fines for just two offenses.
TTF’s founder Andy Agathangelou told Reaction‘s Maggie Pagano last week: “We need properly functioning and transparent markets … to ensure that capitalism is doing what it is designed to do, and [is not] distorted by the bad behaviour of big corporations.”
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 29 September 2020
Transparency Task Force’s founder, Andy Agathangelou, has written to Boris Johnson to emphasise the need for a ‘tax amnesty’ for fraud victims unfairly hounded by HMRC for tax on pilfered pensions, writing of ‘the emotional and financial shock that endures, without reprieve, when a member of the public is defrauded of their pension savings’.
The TTF letter follows a promising meeting last Friday between the Prime Minister, Andy Agathangelou, pension scam victim David Burgess and his wife Lana. Mr Burgess is a constituent of Mr Johnson’s in Uxbridge. Several years ago he lost a devastating £38,000 of savings in an HMRC-registered Ark pension scheme, since deemed by a High Court judge to be a ‘fraud on the trustee’s powers’.
A key reason Mr Burgess had trusted the Ark scheme was ‘because it was registered with HMRC and the Pensions Regulator’. In 2015, Mr Johnson – as Mr Burgess’s MP – had promised to contact Linn Homer, then-head of HMRC, to raise his case. However, David and his wife Lana heard nothing back from Mr Johnson at the time and remained in suspense. Hopefully, this new engagement indicates some willingness to grasp the nettle?
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 21 September 2020
Parliamentarians would like to change the law to help protect £trillions of pension pot savings from being stolen or squandered in the UK. What needs to happen?
The Pensions Bill is progressing through Parliament and at least 31 MPs have expressed an interest in the All-Party Group on pension scams, which we helped set up at the beginning of the summer. So far, two ‘Wild West’ arenas appear to be drawing interest:
- Online spaces, which appear to be a free-for-all for fraudsters to advertise in.
- International activity – with scammers who operate across jurisdictions, but face consequences in none of them.
TTF’s founder Andy Agathangelou told MPs’ Inquiry on Pension Scams last Wednesday: “We see a general lack of international collaboration … we are quite concerned that there is a very problematic grey area … when somebody carries out a transfer where part of the process involves an unregulated entity operating outside the UK.
“We think there is a huge breach going on that needs to be looked at and we think that many people have been told by the regulators that the regulators cannot help because it is outside their jurisdiction. We believe the regulators—at least in some cases, possibly many cases—are wrong.”
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 14 September 2020
“I have long been concerned about the approaches of offshore advisers and I believe that this should be the particular focus …” commented Bob Blackman last week, as he was appointed to chair our All-Party Parliamentary Group on Pension Scams. Rob Roberts, Lord Kirkhope and Nick Smith will vice-chair, supported by a voluntary Secretariat – get in touch if you’d like to help.
This week, TTF’s founder Andy Agathangelou is looking forward to delivering our evidence to MPs’ newly-opened Pension Scams Inquiry – which we campaigned for – he’ll be on Parliament TV at 9am this Wednesday.
Tip of an iceberg
The inquiry on pension scams chaired by Stephen Timms – which will focus on ‘pension freedoms’ legislation – can only skim the surface of the UK’s vulnerability to fraud more widely. Although bank branch staff stopped £19m cons in the first half of 2020, this category of crime is booming. Action Fraud’s interactive dashboard shows that alleged fraud victims’ reported losses in July edged towards half a £billion — £418.6M in that month alone from 37,414 incidents, an approximate tripling on previous rates.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 07 September 2020
TTF’s founder Andy Agathangelou and I have completed TTF’s sixth interview documenting the impact of pension scams, on the cusp of a Parliamentary inquiry that TTF called for. The interviewee, who was scammed of a pension worth at least £40,000, is working all-hours to try to recoup his savings. He believes he has strong evidence on the group that scammed him and that they are still operating: “Why aren’t they arrested now? … Why can’t something be done about these people? I do a 14-hour shift, every day, and then I come back here and do they wonder why I’ve got the hump. … I’ve got no life, as a working person; I’d love to do a 9-to-5 and I can’t.”
MPs’ preferred deadline is this Wednesday for submitting your own evidence to the inquiry. Beyond this, the All Party Parliamentary Group on Pension Scams also has its inaugural meeting this week. The members are: Jonathan Reynolds the Shadow Secretary for Work and Pensions; Bob Blackman – Conservative MP for Harrow East; Jack Dromey Labour MP for Birmingham Erdington; Harriet Baldwin Conservative MP for West Worcestershire; Nick Smith Labour MP for Blaenau Gwent; Yvonne Fovargue Labour MP for Makerfield; Christina Rees Labour MP for Neith; Henry Smith Conservative MP for Crawley; Lord Balfe Conservative peer; Baroness Crawley, Labour peer; Baroness Bowles Lib Dem peer and Lord Harris, Labour peer.
If you would like to get involved in supporting this, please get in touch.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 01 September 2020
The independent investigator of complaints against city watchdogs, Antony Townsend, has spoken out against regulators’ plan to impose a £10,000 ceiling on compensation if they caused financial loss. Transparency Task Force is hosting a special Symposium tomorrow to discuss the controversy, to help inform our reply to the FCA’s truncated 8-week consultation.
The FCA’s plan states that in ‘exceptional circumstances’ more than £10,000 may be awarded when they have caused financial loss. However, those circumstances are not defined. In his considered response, Mr Townsend says that, in his opinion, the compensation cap is not honouring the spirit of the ‘statutory immunity’ from being sued that has long been afforded to Regulators by Parliament.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 24 August 2020
The Complaints Commissioner has just critiqued City watchdogs for running a truncated eight-week consultation that caps payments for financial loss at £10,000 where regulators’ failings were the ‘sole or primary cause’ of the loss.
Anthony Townsend, the Complaints Commissioner, said the proposals “represent an explicit fettering of compensation for direct financial loss.”
Andy Agathangelou, Transparency Task Force Founder, has organised a special Symposium on this issue on 2nd September, prior to the consultation deadline on September 14th. He says: “This issue is of great concern to TTF because we want to do all we can to help protect consumers’ interests, hence our symposium and of course we’ll also be responding to the consultation itself.”
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 17 August 2020
This week we are asking we have found no instances of the Pension Protection Fund’s Fraud Compensation Fund being used to support scam victims?
Some are hoping that a High Court case, The Board of the Pensions Protection Fund and Dalriada Trustees, could break the deadlock.
In other news, The Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England are currently consulting on ‘Complaints Against the Regulators’. The FCA is proposing to cap compensation for ‘very high level of distress’ caused by ‘a major failure of our processes’ at £1000; while refusing to interview complainants or witnesses. Get your views in.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 10 August 2020
Pension scammers can strip enormous sums of money from savers, thanks in part to very low public awareness of the problem. We believe victims’ stories need to be heard. With this in mind Transparency Task Force is busy interviewing Pension Scam victims to inform MPs’ new Inquiry on Pension Scams. Our deadline is rushing up: September 9th.
If you have been pension-scammed or know somebody who has, this is exactly who we need to hear from the most. TTF can, if you wish compile video interviews – similar to my chat with TTF’s founder, Andy Agathangelou, on TTF TV, to help you to address MPs directly with your concerns.
We also value the input of unnamed, anonymous sources to this investigation. We have pension scam victims on our Advisory Board, we know trust is paramount and we keep confidential sources private.
You can also submit evidence directly to MPs, which we also encourage.
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting, 03 August 2020
Last week brought the very welcome news that MPs on the Work and Pensions Select Committee are heeding TTF’s call to probe pension scams. They want to hear from victims in particular — pension scam victims in 2018 reported losing £82,000 on average, which has a devastating impact. TTF’s Founder Andy Agathangelou welcomed the inquiry in our first ever Vlog, TTF TV .
As the Inquiry chair, Stephen Timms MP, told Radio 4 listeners last week, MPs ‘do not know’ where the money goes in these rogue schemes and it is very unlikely that the Government can recover money lost. However, we hope that the inquiry will help the victims of scams to pursue some measure of justice, and to prevent others being targeted.
In their Call for Evidence, MPs announce: “The deadline for written evidence is 9 September 2020. … your evidence will be able to have more impact on our work if we receive it by the deadline.”
by Alex Varley-Winter, Head of Media Relations & Investigative Reporting 27 July 2020
A new alliance is forming in Westminster against an ‘epidemic’ of devastating scams that are thought to have stripped up to £10bn from people’s hard-earned pension pots. Furthermore, people being targeted in scams increased during lockdown. Last week we prepared the ground for a dedicated All-Party Parliamentary Group on Pension Scams at a meeting between MPs, industry reps and victims. The Group’s inaugural meeting is scheduled for 7 September, and we hope it will serve as a touchstone for meaningful change.