With New Scams Code the Industry Fights Back
22nd June, 2018
On a blistering hot day in London perhaps the last thing you want to be doing is getting together in a conference room with 50 of the great and the good of the pensions industry to hear about the launch of an industry code. But, actually it was very good thing to be doing. So we joined Margaret Snowdon, PASA and head of the Pension Scams Industry Group (PSIG), Ben Fairhead of Pinsent Masons, Michelle Cracknell of TPAS and Lesley Titcomb of the Pensions Regulator to celebrate the PSIG’s launch of version 2 of the Scams Code.
But why do we need a code and why do we need a new one? The answer is, sadly, that scams, which have been around for a very long time, are not going away. As Lesley Titcomb put it “Scammers are shape shifters, they innovate and change.” As they do then so must the industry in their response to dealing with scams and putting a stop to them (well stop might be a bit ambitious but stopping as many as we can is more realistic). That’s why we need a code and thats why we need an evolving code.
We don’t know how much scam activity there is. Lesley noted, rightly, that scams are like icebergs – you only have visibility of the top 1/10th. If you consider a figure that Margaret quoted that version 1 of the Code might have saved £250,000,000 (yes that is ¼ billion pounds) from going to scammers by the industry following publication of the code then the actual amounts of money lost or at risk is staggering.
As was mentioned earlier the scams are changing, evolving (mutating perhaps). Pensions Liberation is less prevalent and the focus is on new ways the scammers can access victims cash. Pension Freedoms has been a game changer. That is one reason the Group has changed its name from the Pensions Liberation Industry Group to replace liberation with scams. The problem is wider and needs recognised which this second version seeks to do.
Surely the government can legislate, why do we need a code which is not compulsory? Well yes, legislation can help but only to an extent. The cold call ban, more restrictive rules on scheme registration and limiting the statutory right to a transfer will help but as Ben Fairhead said “There is no legal silver bullet” to stop scammers hence why Scams Code 2.0 is so important.
So what is different? The main changes between version 1.0 and 2.0 of the code were summed up by Margaret as follows:
- It reflects the new world of scamming.
- Growth in International SiPPs.
- The Hughes judgement.
- Update for QROPS.
- It focuses on vulnerable customers.
- Schemes are encouraged to talk to members.
- Persistent members should be referred to TPAS.
- Makes it easier to report suspected scams to Action Fraud.
- Expanded letters and checklists.
- Highlights member responsibility where warnings are given.
- Has case studies based on real decisions in real schemes.
As scams are not static neither is the code. PSIG is already looking at v2.1 of the code (addresses legal changes) and v2.2 (makes the code more user-friendly). The industry will also be asked to sign up to publicise the use of the code, look at speeding up “white” transfers and start to share information through forums and surveys.
We should all welcome this updated code. It shows that the industry is taking its responsibilities seriously and, by the Pensions Minister endorsing the code, it has the backing of the government. The proof is in how many in the industry adopt it and sign up to say they have. It should really be a no-brainer. This is an important tool in our fight against the scammer. It will not eradicate their menace but it will save some members the grief of being ripped off by the unscrupulous.