Concept argued the risks were just as apparent with requests to transfer to a scheme in the UK as with transfer requests to schemes overseas.
“Transferring from one pension scheme to another is always a complex issue and pension providers, whether in the UK or overseas, have a duty of care to their members to ensure the receiving scheme is bona fide,” said Roger Berry, managing director of the Concept Group, which contributed to the UK’s Code of Good Practice for Combating Pension Scams.
“From our experience of handling pension transfer requests, the issue is as relevant, if not more so, in the UK,” he said. “We’ve received numerous requests to transfer to fraudulent schemes both in outside of the UK.”
Berry believes part of the problem is the perceived irrelevancy of HM Revenue & Customs’ recognised overseas pension list, which, he claims, “does nothing to assist the bona fides of the international pension market place”.
Lost forever
Last month, Aegon revealed 40 out of 50 overseas pension transfer requests it had received since the start of the year were designed to con savers out of their money. It blocked these requests as a result.
The pension provider said advisers should ensure UK clients were wary of scam artists offering free pension reviews, which could lead to their savings being unwittingly moved overseas and lost forever.
Aegon supplied International Adviser with examples where clients were almost conned out of their cash by fraudsters who were either claiming they worked for the UK Government or their pension provider.
In each case the insurer contacted the policyholder to verify the transfer request, but in most instances the pension holder said they had no intention of moving outside the UK.
“Clients must always use regulated advice because they will not be anywhere near as vulnerable to scams,” said Kate Smith, regulatory strategy manager at Aegon UK.
Locked in
Paul Davies, director of Global QROPS, agreed: “The problems we have encountered are with individuals coming to us who have already received non-FCA-regulated advice.
“Some are in an inappropriate QROPS, where they are locked into an investment with high redemption penalties, making it difficult to transfer without suffering a severe loss.
“Without FCA-regulated advice, a client is leaving themselves exposed with no protection from the FCA.”
Davies added, however, that the risk of fraudulent overseas pension transfer requests had been a major area of concern since the introduction of the QROPS regulation in 2006 and was not a recent development.
