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Crack down on tech firms profiting from online pension scam adverts, MPs say

28 March 2021

Global tech firms such as Google should be held to account for hosting pension scam adverts with legislation needed to stop them profiting from a multibillion-pound scam industry, the Work and Pensions committee has said.

Report summary

A report from the Work and Pensions Committee calls on the Government to 'act quickly and decisively' to protect pension savers, more than five years on from the introduction of the pension freedoms, which have put people at risk of a much wider range of scams and fraud.

The report warns that commonly cited figures of the scale of pension scamming are likely to substantially underestimate the problem.

The situation is likely to be getting worse rather than better, with the covid-19 pandemic offering scammers new opportunities.

The Committee heard throughout its inquiry that pension scammers have moved online, with regulators powerless to hold search engines and social media to account for hosting scam adverts as they do traditional media.

Tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the Committee describes as 'immoral'.

The Government must now rethink its decision to exclude financial harms from the forthcoming Online Safety Bill and use it to legislate against online investment fraud.

In the same way as traditional media, online publishers should be required to ensure financial promotions are authorised.

The report also calls for the multi-agency task force set up to tackle pension fraud to be strengthened.

The existing Project Bloom should be renamed the Pension Scams Centre and given dedicated funding and staffing to manage an intelligence database and law enforcement.

Currently the fragmentation of reporting, investigation and enforcement has made tackling pension scams more difficult.

The Financial Conduct Authority must also 'raise its game' and publish information about its enforcement action, with the Committee hearing numerous criticisms that it is not effective in stopping scams, punishing scammers or retrieving scam proceeds.

Chair's comments

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:

"The pension freedoms brought more choice for savers on how to use their pension pots, but the reforms have also opened up a whole new world of opportunity for scammers and fraudsters.

"At the same time, a woeful lack of online regulation has helped them reach more people than ever before.

"The result is an online free for all, where scammers can advertise with impunity while the tech giants line their pockets from the proceeds of their crimes.

"With global firms such as Google being increasingly influential as providers of information, consumers looking for financial advice are being let down by not being afforded the same level of protection they receive from adverts which appear on television or in a newspaper.

"There must now be parity across the media to ensure all adverts are regulated and the Government should use its Online Safety Bill to act.

"Tighter online regulation must be just the first step in improving protections for savers. Stronger enforcement with a new Pensions Scams Centre, a more effective FCA and extra support for victims are also desperately needed.

"Pension scams can cause huge financial harm and psychological distress and any one of us saving for the future is at risk of falling prey to a scammer.

"The Government and the regulators have been left playing catch-up following the pension freedom reforms and must now act quickly to protect savers and their hard-earned money."

Report findings and recommendations

Recording and reporting

  • The Pension Scams Industry Group estimates that £10 billion has been lost by 40,000 people to pension scams since 2015. The situation is likely to be getting worse rather than better: scammers in all industries look to take advantage of new situations and covid-19 potentially offered them new opportunities. (p10)
  • The reputation of Action Fraud, the UK's national centre for fraud and cybercrime, has been left 'in tatters' by its failure to manage the expectations of victims and a lack of action on cases. It should have a coordinating role for victims and set up appointments with other bodies for them to receive support . Action Fraud should give guidance and a tool to the pensions industry to allow them to more easily report scams. (p14)


  • The Committee welcomes the provisions in the Pensions Schemes Act 2021 that will allow people's statutory right to transfer their pension scheme to be restricted where there is a sign of a pension scam. A review of the system of red and amber flags (to block or pause a transfer) should be published within 18 months of the regulations coming into operation to allow any further legislative changes to be made. (p24)
  • In order to create parity between traditional media, such as TV and newspapers, and new media, including search engines and social networks, paid-for advertising on online platforms should be covered by the regulatory framework for financial promotions. This would require online publishers to ensure that any financial promotion which they communicate has been approved by an authorised person or is exempted from the financial promotions regime. The Government should use the forthcoming Online Safety Bill to legislate against online investment fraud. (p26)


  • Project Bloom, the multi-agency task force, should be given a statutory remit, renamed the Pensions Scams Centre, and given dedicated funding and staffing to manage a pensions scams intelligence database alongside law enforcement. (p45)

Supporting pension scam victims

  • Pension liberation scams, which encourage savers to access their pension before the age of 55, can leave people with large unexpected tax bills. The approach of HMRC in pursuing victims has often lacked empathy and the Treasury should recognise that where a saver has been the victim of a crime and made no financial gain, it may not be in the public interest to demand payment of tax. In future, when people access a defined contribution pension pot before their 55th birthday, the income tax and surcharge due should be paid to HMRC before they receive the balance. (p47)
  • The Committee heard numerous criticisms that the FCA is not effective in stopping scams, punishing scammers or retrieving scam proceeds. There is a compelling case for a much more ambitious approach. The report recommends that the FCA publish a costed plan to raise its game in tackling scams. (p44)
  • Victims of pension scams suffer lifelong financial harm and potential impact on their mental wellbeing. The Department for Work and Pensions should ensure all victims are offered support. (p55)

Accessing pension savings

The report follows the first part of the Committee’s inquiry into protecting pension savers, five years on from the pension freedoms.

The Committee is currently carrying out the second part of the inquiry, which is focused on accessing pension savings. The third and final part will explore the issues around saving in later life.

Further information

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