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Pension scheme fraud on the rise following freedoms

Pension scheme fraud has doubled over the last two years, as freedoms hand new opportunities to scammers.

 
Pension scheme fraud on the rise following freedoms

Pension scheme fraud has doubled over the last two years, research by accounts and audit firm RSM suggests.

In a survey of 142 scheme trustees, secretaries and pension managers conducted in September this year, 37% reported they had experienced some kind of pension fraud, compared to 17% in the same survey in 2013.

The respondents who experienced fraud said pension transfers and other member transactions were the areas most often targeted by fraudsters. Over half said they had identified requests for member transactions they suspected were scams.

The RSM survey also suggested many trustees were breaching The Pension Regulator's recommendations over fraud detection and prevention systems. Just over a quarter (26%) did not know that they were responsible for maintaining the relevant controls, and 40% said they had not tested their internal controls within the past 12 months.

Third-party administered schemes tested their controls least regularly, RSM found, and had suffered the most fraud, while 47% of trustee boards had not received training on mitigating fraud risk, down from 57% in 2013.

RSM head of pensions Ian Bell said: ‘The pension freedoms introduced in April 2015 have transformed the pensions landscape for savers, but also created an environment in which fraudsters see an opportunity to prey on savers’ confusion by offering questionable investment opportunities.

‘Clearly there is much to be done in terms of educating pensions savers, but schemes also have to share the responsibility.’

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