A long-term drop in reporting of pension scams needs to prompt the pensions industry into raising more suspected cases of fraud, according to The Pensions Regulator (TPR).

Data from the national fraud and cybercrime reporting centre, Action Fraud, shows a steady fall in pension scam reports from 1,788 in 2014, to 358 in 2020 – almost an 80% reduction.

In January, TPR warned the Work and Pensions Committee investment fraud, where the source of funds may derive from pension assets, could be on the increase. However, the regulator suggested a lack of data may be “hiding the true picture” of the pension scams landscape.

Action Fraud figures show that pension scam losses can range from under £1,000 up to £500,000, but TPR warned the true scale of the amount lost to pension scams, as well as the number of victims, is likely to be much higher as victims often don’t realise they have been tricked until many years later.

While there has been a slight rise in reporting so far in 2021, TPR has called on the pensions industry to “be on high alert” for criminal or suspicious activity, and to sign up to its Pledge campaign to help combat pension scams. More than 200 organisations have so far signed up to the campaign, which has been designed to encourage better reporting.

TPR executive director of frontline regulation, Nicola Parish, commented: “To fight the scourge of pension scams and keep up with scammers’ ever-changing tactics, we need a clear understanding of the size of the problem and good-quality intelligence.

“While we’ve seen no evidence of a significant increase in pension scams during COVID-19, we believe many across the industry, including trustees, pension providers and administrators, are not reporting suspected scams at a time when the pandemic could leave savers more vulnerable.

“We are working with Action Fraud and industry to ensure the reporting process is clear, understood and effective.”

Head of Action Fraud, Pauline Smith, added: “It’s vital that instances of pension fraud and attempted scams are reported to Action Fraud. Every report helps police get that bit closer to the people committing these awful crimes.

“Information provided in reports to Action Fraud also allows for quick-time disruption activity to take place, such as the removal of fraudulent websites and the blocking of telephone numbers being used to commit fraud, which helps prevent more people falling victim.”

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