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Tory MPs call for FCA vigilance over fresh wave of pension scams

Conservative MPs have told the FCA to remain vigilant over a fresh wave of pension rip-offs and scams in the wake of the Budget pension reforms.

Speaking at the Conservative party conference this afternoon, MPs warned the changes create an opportunity for con artists to target the vulnerable.

The new freedoms will allow anyone over 55 to access their pension pot in full from next April and MPs warned scammers are evolving.

Parliamentary Private Secretary to work and pensions secretary Iain Duncan Smith and Conservative MP Charlie Elphicke said: “I really hate these people who target consumers, prey on them and try to con them. Whether it’s fake charities calling up grannies and trying to con them or people trying to get money from your pension pot, they are all different sides of the same coin. It is unacceptable.

“We need the FCA to be very vigilant, very strong and very tough in making sure we don’t have people preyed upon, particularly elderly people, as has happened in the past.

“We want people to have diverse investments and make decisions that will work best for themselves in the long-term. We want the FCA to be able to make criminal sanctions for people who do this type of thing.”

Conservative MP and Treasury select committee member Mark Garnier added: “When [the new pension freedoms] were announced, some people said this was an opportunity for people to blow their money when the real point is that there is another opportunity for rip-offs. There is a big question about conduct regulation of the marketplace.”

Industry experts also warned that pension liberators are evolving into other scams already to take advantage of the new rules.

Standard Life head of corporate strategy and propositions Jamie Jenkins said: “Scams are a real concern. We are seeing the scammer evolve as the rules on pensions evolve.

“They have moved from saying they will liberate pots before you are 55 to saying that when you are 55 you can take all your money out, don’t worry about the tax and they will give you 25 per cent guaranteed returns per annum on some property development in Spain. It’s a real concern and we have to make people aware of it.”

LV= managing director of retirement solutions John Perks said regulated advice is crucial to defeating the con artists.

He said: “If we can create a system that direct people to and adviser then you can avoid the scammers. But I agree the FCA has to be extremely vigilant, extremely tight and put some financial penalties in place.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Looks like another wave of FSCS fees that law abiding IFAs will be asked to pay for.

  2. Regulated advice should be the only option. If someone is calling themself an adviser then they should be regulated by the FCA and if they then con a client steps can be taken by the FCA.

    We need to outlaw the ability of “advisers” to hide behind non-regulated activities and side step the FCA. Once that has been put in place we need an awareness campaign that highlights the benefits of seeking out a regulated adviser! For a start the FCA’s register should be made more accessible to the public to check on the credentials of their chosen adviser.

  3. The FCA is undoubtledly very strong and very tough, though vigilance doesn’t seem to be its strongest suit, as evidenced by its RMA Returns which (from what I read) seem to be considerably more concerned (obsessed?) with how intermediaries are charging their clients than what they’re actually charging them for.

    That said, given that most of these scammers and rip-off merchants advertise their existence by way of the InterNet, one would think it shouldn’t be too difficult to identify them by way of a routine daily Google search.

    Once identified for what they are, i.e. criminals, the FCA should then refer them to the police rather than spending money paid by regulated intermediaries to go after them themselves.


  4. I have stated this so many times I am sick and fed up of stating it, only allow certain high risk solutions to be purchased/arranged through a regulated, authorised financial adviser. If you don’t, if you allow this to be completed online, directly, based on guidance with no advice it WILL BE A COMPLETE disaster.

    The problem is the advisers will yet again be blamed as the consumer does not understand the difference between guidance and advice, that said neither do the politicians.

    As for MAS, they have shown their true colours via the Labour conference and their feelings towards adviser. I really do think that MAS should be funded by Government. Why should I pay for the Governments failings to educate the nation on basic financial matters.

    Many consumers have less than primary school eduction re financial affairs, leave alone understanding the complex pension options being offered.

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