The number of reported pensions scams has tripled in less than a year, while figures suggest that nearly one in three pension schemes has been affected by fraud, a new study has revealed.
The research, conducted by RSM, revealed that among the schemes affected, 51 per cent were victims in the past 12 months, while around 17 per cent were scammed between 12 and 24 months ago.
The survey highlighted a “worrying” level of complacency among trustees. According to the report, 60 per cent of respondents claimed that fraud was not a significant threat to their scheme, but a quarter failed to recognise that trustees were the party responsible for the systems that prevent and detect fraud.
In terms of volume, pensioner existence fraud – where benefits continue to be paid to relatives of deceased pensioners – was cited as the top fraud experienced by schemes. RSM explained that the growing trend for pensioners to retire overseas is making it more challenging for schemes and their administrators to keep up with changes in circumstances.
Ian Bell, of RSM, said: “Fraud prevention has to be championed at the top but there is evidence from this survey that trustees are failing to take ownership of the issue. In fact, when a quarter of respondents don’t even know that fraud prevention and detection is their responsibility then you know there’s a problem.
“Trustee boards must actively consider fraud risk on at least an annual basis and make sure that risk registers are kept updated. They must also be alert to new and emerging threats and ensure there is a robust fraud risk policy in place with appropriate control measures.
“Generally speaking, there needs to be a much greater recognition of the scale of the fraud problem and a much greater urgency and will to tackle it”
Figures released in last year’s Autumn Statement revealed that almost £19 million was lost to pension scams in the 12 months to March 2016.
Carter Lemon Camerons LLP Solicitors is a City law firm with experience in providing legal services to businesses and victims of pensions fraud. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. For more information about our pensions fraud services, please contact Chris Corney or telephone: 020 7406 1000.