MPs Launch Pension Scams Inquiry & Call for Evidence
by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting
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 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.”
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?
They add that ‘you can tell us anything relevant, even if it isn’t covered by these questions’.
As we previously reported on this Blog, TTF has also been instrumental in helping to set up an All Party Parliamentary Group on Pension Scams that is scheduled to have its first meeting on 7th September.
Conservative MP Bob Blackman will be actively involved in the APPG, and told a group we assembled on Zoom last month: “We need to build up a database, make sure people are aware of scammers and get the pensions industry to front this.”
Susan Flood personally lost £150,000 as a result of a pension scam that was described in Parliament as a ‘fraud on the trustees’ powers’ , elucidated in a High Court judgment as a form of ‘fraud on the power of investment’. She is one of the victims who helped to propel most of our campaigns in this arena and sits -voluntarily- on the TTF’s Advisory Board: “For me as a victim, and others, TTF gave hope, an opportunity and a voice, in places where that was not being listened to.” she said. “The majority of victims I’ve spoken to have been in this situation for ten years.”
Who in Westminster is Taking Action?
Beyond the extremely welcome news of a formal Inquiry, TTF has been instrumental in helping to set up an All-Party Parliamentary Group against Pension Scams.
Composed of MPs and Peers from different parties, we hope this group will serve as a touchstone for meaningful change and engagement between victims, other stakeholders and lawmakers.
So far, twelve parliamentarians have stepped up to the APPG:
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
Lord Harris, Labour peer
Volunteers are also being sought for the APPG’s Secretariat. What the Group does will be decided by the MPs that run it, but some project ideas that have already been floated include: A Question Bank to identify the questions that need to be asked and who of; A database of pension scams; Outreach to other organisations within the Pensions industry; Networks for the Parliamentarians to use; and, helping to compile a Guide for the victims of pension scams.
Press Timeline of relevant articles:
01 Aug 2020 – ‘I lost £2.3m after I was conned into transferring my pension’ by Jessica Beard for Telegraph
28 Jul 2020 – UK Pension Scams Under Scrutiny After 2015 Relaxation in Rules by Reuters; MPs launch inquiry into pension scams by Tom Kelly for Daily Mail & MPs launch wide-ranging pension scams probe 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
29 Dec 2019 – ‘Lambs to the slaughter’ …, by Tom Kelly for the Daily Mail