The number of pension liberation frauds reported to police has dramatically fallen over the last five months, but evidence suggests increasingly sophisticated criminals are targeting ever larger sums.
Latest figures from the City of London police show that in February, the latest month for which figures are available, just 12 cases of liberation fraud were reported.
Numbers of frauds have shown a marked decline since September, when 77 cases were reported. Just a month later, only eight cases were brought to the police.
However, the sums involved continue to escalate – a trend first reported by Money Marketing last October.
That means although the most recent 12 months of data show just over a third of the number of cases reported compared with the previous 12 months, the amount of cash taken from savers increased.
While the year to February 2015 saw £10.5m of frauds reported, the following 12 months saw £13.2m of scams brought to the police, despite the fact these sums were generated by 640 cases, rather than 1,883 cases in the previous 12 months.
Informed Choice managing director Martin Bamford says: “It’s becoming harder for fraudsters to stay under the radar, so they may be targeting smaller numbers of savers to make sure they’re not exposed.
“But that means when fraudsters do pop their head above the parapet, they are going for much bigger cases.
“It suggests the approach is working in that overall numbers are dropping, but perhaps more resource needs to be focused on those larger and more complex frauds.”
“The industry should be charged a small levy to provide compensation as a back-up”
Fairer Finance founder James Daley says the figures show the increasing sophistication of fraudsters, but adds more support should be provided to victims.
He says: “The industry should be charged a small levy to provide compensation as a back-up. They might have a bit of cash going spare when the Money Advice Service has been shut down, so that could be where it’s diverted because the stakes are too high for savers.”
Aegon head of pensions Kate Smith says the provider is expecting to see instances of pension liberation frauds increase following a ruling in February against Royal London. The firm had tried to block an £8,000 transfer to a SSAS in 2014.
Smith says: “That will give the fraudster more confidence. We believe the law needs to be changed to allow us to better protect consumers against liberation scams, but that ruling will allow more of them to take place.”
Number of pension fraud reports
Source: City of London Police