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Savers warned of scams danger as case details published

Ref: PN15-42
Friday 9 October 2015

The Pensions Regulator today published details of its investigation into a suspected multi-million pound scam case and warned savers to remain vigilant against the ongoing threat of scams.

A report details how three individual trustees, Alan Barratt, Susan Dalton and Julian Hanson, acting on third party instruction from David Austin, were deemed by the regulator to have misappropriated scheme funds and exercised poor trustee governance.

Mr Austin is described in today’s report as acting as a shadow trustee in control of the funds paid into a number of pension schemes. Following its inquiry, the regulator believed it was reasonable to infer that a pension scam had taken place in which funds totalling around £13.7 million belonging to 242 members have all but disappeared – including through the payment of exorbitant fees and commission payments.

The report explains how the regulator’s Determinations Panel appointed an independent trustee to administer 17 pension schemes to prevent further loss and to claim back funds.

To read the findings of the panel go to published determinations.

The case features many of the warning signs that people should watch out for to protect themselves from pension scams, including:

  • mass marketing techniques such as cold calling
  • highly suspicious activity including funds transferred from pension schemes to trustee personal bank accounts and third party companies mostly connected to controlling parties
  • the incentive of lump sum payments on completion of the transfer
  • members were provided with inadequate scheme documentation at point of transfer, and, once entered into a scheme, were unable to easily contact the administrator

Andrew Warwick-Thompson, Executive Director responsible for the regulator’s work to disrupt pension scams, said:

"This complex case bears many of the hallmarks of a pension scam and should be seen as another reminder of why savers must remain vigilant against the threat of scams, which have a devastating impact on people’s lives.

“Our appointment of an independent trustee has helped secure approximately £400,000 from the schemes, however for many hundreds of members, hard-earned savings have most likely been lost.

“Our message is clear: if you’re cold called or texted by people claiming they can help you to get early access to the cash in your pension or unusually high investment returns, stop, don’t be tempted, and put the phone down. You’re likely to lose all your money and may face a considerable tax charge."

Editor's notes

  1. The Pension Regulator is working with a taskforce of Government, regulators, financial services bodies and criminal justice agencies (Project Bloom) to disrupt and prevent scams.
  2. The new guidance service Pension Wise is aimed at helping those approaching 55 to understand their options. Citizen’s Advice and The Pensions Advisory Service will provide the expertise required to help people consider their options and make good choices. New requirements have been put in place requiring providers to ask people accessing their pension savings questions based on how they want to access their savings to assess risk. The Pensions Regulator has issued guidance aimed at encouraging trustees to make members aware of the risks in making certain choices. It is now a criminal offence for scammers to impersonate the official guidance service.
  3. Follow information via @actionfrauduk on Twitter and on the Action Fraud page on Facebook.
  4. The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).

Press contacts

Tim Marks 01273 662092