TTF Blog: 3 August 2020

Inquiry Chair’s Message to Victims

The Chair of the Work and Pensions Select Committee, Stephen Timms MP (Labour),  spoke to Radio 4′s ‘You and Yours’ last week, after hearing the harrowing story of a British Steel Worker who lost £128,000, leaving him a ‘broken man’:

Pension scam victim Billy Reed told listeners: “It was a cold call and I accepted it, because it was asking if you’ve got a British Steel pension and if it was sitting idle, not making any money, which I had. [So] I accepted the call, the salesman came and sold me a dream if you like … I just believed every word he said and moved it.”

Radio 4‘s Winifred Robinson asked Mr Reed: “How soon did you realise that this investment that you had been persuaded to put all your pension fund into, wasn’t going to pay up in the way that you had hoped?”

Mr Reed explained: “The guy who actually sold me the dream — I tried to get in touch with him and couldn’t. I hadn’t got verification that my money had been moved. I thought ‘I’m not going ahead with it’ and I tried to stop it. [But] when I phoned up my pension from the British Steel it had already gone. Apparently, unbeknown to me I had signed my waiver to the cooling off period, which I knew nothing about.”

Stephen Timms MP replied on the programme: “Unfortunately Billy’s experience is all too common. There were lots of people working at British Steel who fell prey to crooks. And in 2015, after what happened to Billy I think, there was a set of what the Government called Pension Freedoms introduced, which increased the options for pension savers, for what they could do with their money, but also unfortunately created new opportunities for fraudsters and others to take advantage of other people’s savings. The problem’s got bigger since 2015.”

WR: You’ve called the people who ended up fleecing Mr Reed crooks. I can’t call them crooks, what I can tell you is that the investment certainly did turn to dust. What form is this inquiry of yours going to take?

ST: We’d like to get evidence from victims, people who’ve suffered this problem, from people in the industry, we’d like written evidence from people with ideas about what to do about it. And, later in the inquiry, sort of September October, we’ll be asking people to come in front of the Committee so we can quiz them about their ideas and experiences. And, at the end we’ll bring in regulators and a Minister I hope, as well, to talk about what we’ve heard and … the changes that the Government might make to tackle the problem.

WR: But for people like Mr Reed, is there any hope that you might be able to do anything to help him to get his money back?

ST: … It’s unlikely that anything the government can do now, would be able to provide that money back to Billy. What I hope we can do though, is make changes in the system so that this problem doesn’t happen anything like as much in the future as has been happening in the last few years.

WR: Mr Reed briefly, if I can, will you give evidence to the inquiry? Do you want to help?

BR: More than likely, more than ever. If I can stop something like this happening to somebody else, then I’d be more than willing to help.

WR: Billy Reed, Stephen Timms MP, thank you both.

Key Questions in Pension Scams Probe

In their ‘Call for Evidence’, the MPs list some of the questions they hope to answer in their inquiry:

1. What is the prevalence of pension scams?

2. What are the current trends in pension scams?

3. What are the common outcomes of pension scams for perpetrators and victims?

4. How are existing enforcement tools being used?

5. What more can be done to prevent pension scammers operating?

6. What more can be done to prevent individuals becoming victims of pension scams?

7. What role should the pensions industry have in preventing scams?

8. Is HMRC’s position on the tax treatment of pension scam victims correct?

9. Are public bodies co-ordinating the response to pension scams?