On the go: Nearly 500 people have so far completed a pensions safeguarding guidance interview since new anti-scam rules were introduced at the end of November 2021.
According to a freedom of information request by consultants LCP to the Money and Pensions Service, it found that of 792 contacts to date, 488 have resulted in completed interviews, with another 178 interviews in the pipeline.
A further 100 did not result in an interview because the member did not show up, they were cancelled, or they could not be completed for some reason.
The FOIA data followed regulations introduced in November 2021 by the Department for Work and Pensions, which gave pension trustees and scheme managers the power to halt a transfer if they deemed necessary by raising a ‘red flag’.
In addition, they could also raise an ‘amber flag’ if they suspect a potential scam, meaning the member would then have to provide evidence they have taken specific scam guidance from Maps before they are allowed to transfer.
The rules effectively reversed a High Court decision from 2016, which ruled that Royal London could not stop its client from transferring her pension, despite concerns about the status of the receiving scheme and Donna-Marie Hughes’ right to transfer her pension into it.
Experts at the time warned that the ruling would have far-reaching consequences, ultimately leading to a potential influx of money into suspicious schemes.
Where an amber flag is triggered, the member will have to provide evidence that they have completed an anti-scam ‘safeguarding’ interview before the transfer may proceed.
Daniel Jacobson, senior consultant at LCP, said: “It is early days for the new regime but it is clear that hundreds of people have already been required to take part in an anti-scam interview before their pension transfer could go ahead.
“At this stage we do not know whether there was an actual risk of a scam in many — or indeed any — of these cases, or whether providers are simply routinely referring a large proportion of potential transfers for guidance, rather than carrying out the expected due diligence under the new transfer regulations.”
Jacobson said there is no data yet on whether the member simply “ticked the box” by taking part in an interview but then carried on with the planned transfer regardless.
“It is very important that the DWP and Maps undertake research into what sorts of cases are being referred, what happens during these conversations, and how consumer behaviour is being altered as a result,” he added.
“Only then can we say for sure whether these new measures are genuinely protecting consumers.”
This article originally appeared on FTAdviser.com
