I make no apologies for returning to the subject of a number of past blogs and articles – pension scams. Firstly, because it’s the day job (sorting out the chaos that usually ensues, as an independent trustee appointed by the Pensions Regulator before anyone panics) and secondly because they are still going on with a horrendous impact on those who fall victim, and need to be highlighted at every opportunity.
In case you missed it, the Pensions Regulator issued a press release last week highlighting action it had taken to prohibit John Garry Williams (also known as Garry John Williams) and Susan Lynn Huxley from being trustees of pension schemes for failing to be “fit or proper”. The Pensions Regulator cited “a lack of integrity, competence and capability”. The full press release and related notices can be found here.
The press release outlined classic elements of scam behaviour including:
- Potential scheme members were cold called and text messaged by introducers, who were paid on commission by 5G Futures Pension.
- Without their knowledge, members’ funds were invested in exotic sounding, unregulated investments overseas, such as tree plantations in Fiji, Brazilian teak plantation land and fund shares based in the Cayman Islands.
- The scheme appeared to have been a vehicle for pension liberation and that the trustees were aware of this. TPR found that some scheme members (below the age of 55) received cash advances or loans via introducers and, in at least one case, Ms Huxley arranged for a scheme member to receive a loan directly from the scheme assets.
Perhaps the most salient and devastating fact for members was that out of a total of £16 million invested, and remember this was made up of transfers from other, reputable schemes, the value
was reduced to approximately £991,000. Any return to members is likely to be a tiny fraction of the transfer value they paid in. This is all before any tax penalties are considered in respect of the liberation payments.
Whilst there is much to mull over in this sorry affair, the one point that stood out for me was that, once again, the route for the scammer to the victims was cold calling (and texting). Last year a concerted effort was made to highlight the scourge of the cold caller. Darren Cooke, an independent financial adviser, started a petition to get a cold call ban debated in parliament. It received universal industry support, a U Turn from the government (as explained by the former Pension Minister, Baroness Altmann) and, following a statement of intent in the Chancellor’s Autumn statement, led to a consultation at the back end of 2016. We supported a ban, gave our views in a response to the consultation and sat back waiting for the DWP response that was promised in Spring 2017. Despite the weather feeling still a bit Spring-like, the response has not been forthcoming. It has been caught up in the inertia that envelopes government when a general election is called. It is unlikely that a response will be forthcoming for a good few months and we have to hope that it does not fall off the edge of a cliff.
In the meantime, there is no ban on cold calling. The scammers are still out there and can still contact potential victims with their promises of guaranteed returns and buy while stocks last investments. As an industry we cannot allow this to continue and pressure must be kept up on government to follow through on the consultation. Will it make the problem go away? No, not totally but anything that makes life more difficult for scammers and stops people losing their hard earned savings cannot be allowed to be pushed back too far.