More than half of salary transfers from salaries are still at risk of fraud

Recent research shows that the alarming trend continues.

More than half of retirees were at risk of fraud when they transferred their pension from the final wage plan to a defined benefit (DB) last month.

An analysis by the director of the XPS pension plan found that transfer values ​​increased during March to around £ 245,000, recovering about a third of the sharp fall experienced in February.

This increase was largely due to the rise in expectations for future inflation that raised the expected value of peer pensions, XPS said.

The Red Flags Index has warned that while the number of potential transfer requests in the programs it manages has dropped from 60% in February to 52% in March, it is still high.

Helen Kabanaga, a consultant at the XPS pension group, says: “We are pleased to see the continued decline in the red flag index.

“However, more than half of the cases still show warning signs that could indicate fraud, or at least, the potential for poor results of friends. It remains much higher than the level of red flags we saw before the plague.”

She warns that some of the advisers still do not have additional disclosure requirements introduced last year.

Advisors who make pension transfers are now required to complete one-page compliance reports explaining their advice, charges and risks in transitioning from the DB program.

They must also confirm that a customer understands what he has advised.

The Financial Conduct Authority has released its long-awaited final guidelines to pension transfer advisory companies in March.

The municipality’s watchdog said that for most consumers it is better to stay on their DB pension.

It says there: “When a person seeks transfer advice, we expect companies to give advice that is appropriate and appropriate to their needs and situation.”

Regulators have also warned that some of the scams are unreported.

Nicola Parish, CEO of the Pension Regulator for Regulation at the Front, says: “To combat the scourge of pension fraud and keep abreast of the changing tactics of scammers, we need a clear understanding of the magnitude of the problem and good quality intelligence.

“Although we have seen no evidence of a significant increase in pension fraud during Covid 19, we believe many across the industry, including trustees, pensioners and managers, do not report fraud while the epidemic may leave savers vulnerable.”

She says scams should be reported for fraudulent acts or by calling 101 in Scotland.