TTF Blog: 07 September 2020

MPs' & Lords' Group on Pension Scams launches today

by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting

Last Friday TTF’s founder Andy Agathangelou and myself completed TTF’s sixth interview documenting the impact of pension scams, on the cusp of a Parliamentary inquiry that TTF called for.

In this final interview a man who was scammed of at least £40,000 told us how it felt. He strongly suspects from what he has seen online that the group who targeted him are still operational: “Why aren’t they arrested now? Why can’t something be done about these people? I do a fourteen 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.”

In light of that, we’re very pleased to say that our evidence to the inquiry is nearly complete — the deadline is this Wednesday for those wanting to submit your own evidence. Beyond this, the All Party Parliamentary Group on Pension Scams also has its inaugural meeting this week. The members are: Jonathan Reynolds, Lab-Co-op MP for Stalybridge and Hyde and 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.  We hope that this will help to support victims and, if you would like to get involved in supporting this group, please get in touch.

Are the police, FCA and other regulators ignoring fraud?

TTF’s founder Andy Agathangelou summed up the claims being repeatedly brought to TTF’s attention last Wednesday, at a special event to discuss how regulators handle complaints: “Regulators have not yet got to grips with how to close down scam operations, how to close down crooks in the system, and one of the things that’s kept coming up time and time again is how, when individuals have given the regulators information that we believe they could and should act on, for some reason, they failed to do so”.

He added that the response should not be ‘attack, attack, attack’: “Like any large institution, any large regulator is going to have flaws — and scope for improvement. So our attitude of mind is to be constructively critical.” The speakers broadly concurred that tackling fraud cannot happen in any meaningful way without proactive behaviour from regulators and within the industry itself — one example is the Banking Protocol, which has helped block a substantial amount of suspicious transactions in recent years.

Nevertheless, as the world enters its third recession in 30 years, fraud is widely reported to be soaring, and the Times‘ Ben Ellery recently found that the Met Police has only thirty financial officers. Consider this alongside the fact that the Crime Survey of England and Wales reported 3.7 million fraud offences this year and: “Action Fraud reported a 9% rise … Cifas reported a 7% rise … and UK Finance reported a 47% rise.” It is estimated to cost the financial equivalent of 10% of GDP each year.

Meanwhile, a TTF adviser was intrigued by the FCA giving two different responses on how few boiler room scams it prosecuted. Connaught fraud victim Mark Bishop — who spoke at our event on complaints to the regulators last Wednesday — had obtained figures using the Freedom of Information Act: Initially, the FCA told Mr Bishop that it had shut down one boiler room scam in the last five years. However, when the Times‘ James Hurley contacted them to check, they said that was an error and that they shut down four – but none of those in the last twelve months. An FCA spokeswoman  commented that they do ‘all we can’ to disrupt boiler scam operations: “Many boiler rooms operate overseas, which means we have no jurisdiction. In addition to issuing warnings, we work closely with other law enforcement agencies, including overseas, to help take action.

Complaints Commissioner Antony Townsend has also been calling out the FCA for inaction: ‘because the police took the lead in many fraud cases, fraud was in some way of little interest to the regulator‘, Townsend wrote in his most recent annual report.

Mr Townsend added, in his case study of one complaint, that the FCA twice dismissed as “of no regulatory interest” matters which —  if true —  “were clearly highly relevant to its regulatory remit.”

Police lobbying for more resources

Thames Valley Police and Crime Commissioner Anthony Stansfeld often points out that the police are poorly resourced to fight fraud.  Thames Valley famously prosecuted a few hundred £million of a a £billion fraud at HBOS Reading (detailed here by File on Four). The probe cost the force £7m that was not funded by the Treasury.

Last week Mr Stansfeld remarked: “The police have so many other things to deal with … and find it easy to either say it’s a civil matter or pass it to Action Fraud. … it just disappears when it goes there and nothing is ever really done.”

It was tenacious victims like Nikki and Paul Turner who helped bring about the HBOS probe, and we see this tenacity from underdogs and whistleblowers time and time again in investigating and exposing major financial crimes. Mr Stansfeld said: “What I find is so extraordinary is that people like you or I should be taking this on when it should be the regulatory authorities.

“We’ve got the Financial Conduct Authority, we’ve got the Serious Fraud Office, we’ve got the National Crime Agency, we’ve got the Financial Reporting Council we’ve got the Bank of England’s P.R.A. we’ve got the City of London [Police]. And then you have all the regulatory bodies within the industries,  … which ought to be protecting their customers not protecting crooked members, which they seem to do far too often.”

He added an intriguing example of a case being – to his view – sent around the houses: “Seventeen large files of forged documents and signatures have been lodged with the National Crime Agency. They started off by trying to hand it to the FCA who passed it on to the SFO and it’s back with the NCA at the moment.

“The Treasury Select Committee asked them well over a year ago to investigate these files, as far as I’m aware absolutely nothing has been done. …. The NCA won’t tell you if they’re investigating something, and I can quite understand that. But … [to his knowledge] none of the people involved who had their businesses taken away, or their houses taken away, have ever been interviewed by them.”

What is the ‘national strategy’ on fraud?

Taking Mr Stansfeld’s hint, I’ve had a quick trawl for updates from the Treasury Committee regarding fraud, and found the HMCIFRS last year reported “there is no current government or national policing strategy for tackling fraud”, and that the Government was told to create one. Where’s that got to?

In this letter from James Brokenshire MP to Mel Stride MP on 1st May, Mr Brokenshire said that there is one. This new strategy will make the policing response to fraud much more joined up from the reporting, triage, and investigation, through to the victim care response. The strategy and its implementation will be reviewed at the end of 2020.”

Mr Brokenshire also said it’s ‘published’… er, not so sure. While writing this, I did a search of all police, government and parliamentary websites for the strategy, and found three documents including this early outline at a police chiefs’ meeting in summer, 2019. They said at the time: “The strategy aims to secure additional resources for fraud  … An investment case for an additional 400 FTE across policing is being developed.” I also found an economic crime plan from the Government. But, I don’t find the National Fraud Policing Strategy on the City of London Police website where it appears to have been taken offline.

UPDATE – 08 Sep 2020: A City of London Police media officer has responded to an email I sent asking for the national fraud policing strategy document – it is here and worth browsing.

It observes that fraud can be a key income stream for ‘organised crime’, and the potentially devastating impact on victims: “Fraudsters do not only take victims’ money. They take their sense of security, confidence and well-being. … This has led to victims feeling suicidal and taking their own lives. Fraud losses put small businesses at risk”.

It also observes the need for information from outside sources: “Much of the intelligence needed to understand the nature and scale of the threat is held outside of policing, in particular, within the private sector.”

I’m quite struck by these goals within the national strategy:

  • Establishing a victim oversight board
  • Setting a goal for the National Fraud Intelligence Bureau to update fraud complainants on the outcome of their report within 28 days
  • Raising awareness among investigators “of disruptive powers, including cease and desist, asset denial and serious crime prevention orders with consideration of these options embedded within strategic and tactical plans”
  • Implementing a new Fraud Investigation Model for serious and complex fraud investigations by December 2020

The report further observed (in 2019) an apparent need for targeted funding and specialised recruitment: “Policing will seek additional investment from government to increase its investigative capacity over the next 3 years. “

There’s more detail on strategy, specific goals, and responsible agencies, in the document itself. The content on the whole appears to me to support Anthony Stansfeld’s point about funding: police nationally have been appealing for specialised resource and recruitment on a par with cybercrime. Other key elements of the plan appear to be- Police Crime Commissioners monitoring the issue, and Regional Fraud Development Officers delivering on goals locally.

Insufficient resources? The National Crime Agency

Press Timeline of relevant articles:

03 Sep 2020Regulators have not yet got to grips with how to close down crooks, warns TTF  by Hope William-Smith for Professional Pensions

24 Aug 2020Financial Conduct Authority rushes to minimise compensation for its failings by James Hurley for The Times

04 Aug 2020Have your say: Will the WPC’s inquiry into the impact of pension freedoms be too overshadowed by Covid-19 impacts? by Professional Pensions

03 Aug 2020 – ‘“I’m 39, have lost my job and am in debt – can I unlock my £18k pension?” … DON’T do it!’‘ by Steve Webb for This is Money

01 Aug 2020‘I lost £2.3m after I was conned into transferring my pension’ by Jessica Beard for the Telegraph

31 Jul 2020 ‘Common sense’ prevails as pension freedom withdrawals fall 17% — But drop is expected to be ‘a short-term blip’ by Robbie Lawther for International Adviser

31 Jul 2020HMRC figures show plunging pension freedom withdrawals by Hope William-Smith for Professional Adviser

28 Jul 2020MPs launch inquiry into pension scams  by Tom Kelly for Daily MailUK Pension Scams Under Scrutiny After 2015 Relaxation in Rules by Reuters & MPs launch wide-ranging pension scams probe by Justin Cash for MoneyMarketing

24 Jul 2020 – US business groups seek steps to stamp out online fraud by Leonie Barrie for Just Style

22 Jul 2020Pension scams increase amid lockdown by Sophie Smith for Pensions Age & Missed Opportunity to Use Victims in Scam Work by Amy Austin for FT Adviser

20 Jul 2020 Campaigners Aim to Create Pension Scam Database by Michael Klimes & Government eyes unauthorised firms by Justin Cash for MoneyMarketing

29 Jun 2020 – MPs Pushed to Launch Pension Scam Inquiry by Amy Austin for FT Adviser & Lawmakers Urged To Open Inquiry Into Pension Scams by Martin Croucher for Law 360

11 May 2020 – FCA urged to build public trust in independent reviews by Rachel Mortimer for FT Adviser

15 Apr 2020 – Met police lose two thirds of finance officers as fraud soars by Ben Ellery for the Times

20 Mar 2020 – Connaught review delayed as Covid-19 concerns loom by Rachel Mortimer in FT Adviser

29 Dec 2019‘Lambs to the slaughter – tens of thousands of savers have lost up to £10billion in rogue pensions schemes sanctioned by the government… and now the taxman is threatening VICTIMS with fines’, by Tom Kelly for the Daily Mail

15 Aug 2019Victims hit by Connaught’s collapse blast City watchdog for ‘whitewashing’ independent review by Lucy White for Daily Mail

18 Jun 2019“I came home to find my house had been stolen!” by Angela Ellis-Jones for the Daily Mail

20 Jun 2019 – FCA orders review of its handling of Connaught collapse by Rachel Mortimer for FT Adviser

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