MPs call on government to mandate anti-scam intelligence sharing

The committee members demanded that the government acts “quickly and decisively” to shore up anti-scam defences after the introduction of pension freedoms five years ago opened up schemes and members to a host of new scams.

Intelligence sharing within the industry is vital if scams are to be identified and tackled, they said in their report published on Sunday that forms part of an ongoing inquiry into the impact of pension freedoms.

Though “the pensions industry does not universally share information about possible scams among providers and schemes”, the committee noted some headway had been gained through voluntary participation in the Pension Scams Industry Group.

Tighter online regulation must be just the first step in improving protections for savers

Stephen Timms, Work and Pensions Committee

But this should be bolstered by a firm, industry-wide requirement to share information and intelligence, they continued.

“We recommend that Project Bloom should facilitate industry intelligence sharing and that the government should legislate to require industry participation in intelligence sharing at the next opportunity,” the committee wrote.

There have long been calls to strengthen Project Bloom, the Pensions Regulator’s unfunded and voluntary project set up to tackle pension scams. 

In March, pensions minister Guy Opperman wrote to 90 large schemes to press them to co-operate with the PSIG, while in January he suggested that HM Revenue & Customs itself should participate in Project Bloom.

In a Pensions Expert podcast in February, committee chair Stephen Timms said that while Project Bloom is a “good approach”, its status should possibly be “upgraded in some way to give it the clout that it needs”.

Crackdown on tech firms

More broadly, the committee urged the government to take action against scammers who have moved online, not least by cracking down on tech giants like Google, which may be profiting from scam advertisements.

“Tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings,” according to a summary of the committee’s findings, a practice which committee members described as “immoral”.

Among a plethora of measures designed to tackle the problem of scams and fraud in general, the committee suggested that online publishers should be required to ensure financial promotions are authorised, just as traditional media must.

The government should rethink its decision to exclude financial harms from the upcoming Online Safety Bill, which should be used to legislate against online investment fraud, the committee said.

Project Bloom should be renamed the Pension Scams Centre, and be given dedicated funding and staffing “to manage an intelligence database and law enforcement”, while the problem of fragmentation — identified by Timms in the Pensions Expert podcast — should be addressed.

In his foreword to the committee’s report, Timms wrote that a lack of regulation accompanying the introduction of pension freedoms has led to “an online free-for-all, where scammers can advertise with impunity while the tech giants line their pockets from the proceeds of their crimes”.

He called for parity across the media “to ensure all adverts are regulated”, but added that “tighter online regulation must be just the first step in improving protections for savers”.

“Pension scams can cause huge financial harm and psychological distress, and any one of us saving for the future is at risk of falling prey to a scammer,” Timms wrote.

“The government and the regulators have been left playing catch-up following the pension freedom reforms and must now act quickly to protect savers and their hard-earned money.”