NEWS   |    October 29, 2020

Partner Rosalind Connor comments in Money Marketing on the most effective way to tackle pension scams

Campaigners are focusing their efforts on getting legislators to change the Online Harms Bill. IFAs, who have complained they have to cover the damage from online scams and the current rules are out of date, have sounded a positive note on the bill, which aims to update legislation for the internet age and make the digital world safer. They should certainly welcome the intention of the proposed legislation, but will it work to weed out scammers?

The most effective way of tackling scams is bound up with other beliefs about what constitutes good advice, guidance and education.

Rosalind Connor commented:

“The problem is regulators and particularly politicians want to allow people to move and change their financial products with a view to ensuring some proper competition in the markets. The obvious way of dealing with scammers is to make it difficult for people to take out or change a financial product, but there are obvious problems with that policy.”

“Both the liberation of the personal pension market by Margaret Thatcher and the freedom and choice changes by George Osborne were heralded on the idea of personal freedom. People know what they want and it is very unpopular politically to argue against that.”

“The most effective response to scams is providing more consumer information to counter them. The problem is that scams can look really plausible; pensions people would be immediately suspicious of someone offering to invest their pension, but to anyone else they can look very sensible. This is because they don’t know that pension scams are a significant phenomenon, and the same must be true of other financial scams.”

In relation to what the role for financial advisers is given the fact the majority of the public do not have one, she further commented:

“This is certainly a real problem. Financial advice is highly specialised and not always affordable. Also, people may not think of these products requiring advice.”

“People being scammed often don’t want independent advice as they think it will stop them taking the product that offers great returns. Advice is of course the ultimate protection, but increasingly we are seeing people not taking that option.”

Read Rosalind’s comments in Money Marketing.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.

Related News