HM Revenue & Customs is set to de-register up to 500 pension liberation schemes as part of an initiative known as Project Bloom.
Speaking at a Financial Conduct Authority conference on financial crime this week, FCA manager of intelligence interface Felicity Johnson said HMRC is poised to act against a large number of schemes it is not happy with.
She said: “HMRC is reviewing its registration procedures for providers and will shortly be deregulating 400 to 500 dubious providers.”
She said the FCA is also reviewing activity by Sipp providers in pension liberation.
Project Bloom is a joint effort to tackle liberation fraud by the FCA, The Pensions Regulator, police, the Serious Fraud Office and other organisations.
FCA chief executive Martin Wheatley promised to crack down on regulated advisers who work with pension liberation firms. He said they can provide firms with the “veneer of respectability” by recommending them to clients.
In May, City of London Police dismantled a suspected organised crime gang believed to be cold-calling and text messaging people across the UK with fraudulent pension liberation offers.
Providers have also attempted to tackle the problem by delaying or blocking transfers to schemes they suspect are being used for pension liberation.
Hargreaves Lansdown Tom McPhail says: “By de-registering these schemes it shows HMRC is treating liberation issues seriously but we need to look at the registration process that allowed these schemes to be set up in the first place.
“I do not see how they can operate a process without manual intervention. There is a fairly rigorous FCA vetting process for contract-based schemes and Sipps, the problem lies with small trust-based schemes.”