The quality of advisers, including unregulated introducers, advisers in different countries from the member and advisers who have previous transgressions, is the greatest area for pension scam concern, according to new research from the Pension Scams Industry Group (PSIG).

PSIG's report, 'The PSIG Scams Survey Pilot 2018', found that 52 per cent of the 'red flags' raised by due diligence during 2018 involved the quality of adviser, making it the biggest concern.

This was closely followed by member awareness as, in 49 per cent of cases, the member had “limited understanding or appeared to be unaware of who was providing the advice, the fees being charges or the receiving scheme to which the transfer would be made”.

PSIG's research also found that 20 per cent of 'red flags' related to the terms of the transfer including investment returns, guarantees made or the ability to access funds.

Additionally, 19 per cent of 'flags' related to the receiving scheme itself being suspicious, while 12 per cent involved cold calling or similar, although this figure may decline following the introduction of the pension cold-calling ban.

Commenting on the findings, PSIG chair, Margaret Snowdon OBE said: “This research highlights that some things we previously assumed are not necessarily the case.

“For example, the number of transfers originating from a cold call amounted to only six per cent, whilst the number of suspicious cases involving unregulated advisers or introducers was far higher.

“This shows that our efforts to convince individuals about the dangers of scams cannot simply focus on the cold-calling ban, as perpetrators are already using other means of contact - like email and online advertising, as well as word of mouth and factory-gating.”

Following the findings of its survey, PSIG concluded that information on scams is “not readily available at an organisational level”, although significant time and effort goes into protecting members from scams.

It also found that the more detailed the due diligence, the more suspicious traits are identified, and that self-invested personal pensions are the most common vehicle of choice for scammers.

Snowdon added: “Scams destroy lives, so we need to do what we can to limit them. The statutory right to transfer constrains trustees in this regard, as they do not have discretion to refuse a transfer.

“Forthcoming legislative changes to restrict the statutory right to transfer will help to reduce the opportunity for scammers but, without the power to refuse, will increase the responsibility of trustees and the risks they face.”

PSIG's survey consisted of information from three providers between January - December 2018, XPS Pensions Group, Phoenix Life Assurance Company and Standard Life Assurance Company.

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