The government is helping shut the door on social media scammers trying to plunder people’s pensions under new scam prevention measures due this autumn.
Under the plans, suspicious requests could be stopped if pensions savers have been approached to access or transfer their savings uninvited via social media.
Such unsolicited contact would trigger a “red flag” which would mean pension trustees or scheme managers can block it.
Many scammers are using social media and other online channels to offer people “too good to be true” incentives such as free pension reviews, early access to their money, or time limited offers. Lured by these attractive offers, people are coerced into transferring their savings into a scam scheme designed to fleece them of their savings.
Minister for Pensions Guy Opperman said:
“Pension scammers are the lowest of the low, and with the growth in recent years of online scams we must act now to curb them.”
“Our new regulations will build a strong, first line of defence in the fight against pension fraud – helping stop these crooks from making off with people’s hard-earned savings.”
Most pension transfers are legitimate and can proceed with minimum intervention. However, the Pension Scams Industry Group estimates five percent of all transfer requests give trustees and scheme managers cause for concern.
The pension transfer regulations – published on GOV.UK for consultation today – will introduce a new red and amber flag system.
These will allow for transfers to be prevented or paused whilst the member takes guidance about the possibility of scams.
The consultation on the draft regulations is available on GOV.UK and is open for responses until 9 June 2021.