Written evidence from Manita Khuller (PPS0078)

Contents 1. Executive Summary ------1 2. Question Responses ------2 2.1. What is the prevalence of pension scams ------4 2.2. What are the current trends in pension scams?------5 2.3. What are the common outcomes of pension scams for perpetrators and victims?------6 2.4. How are existing enforcement tools being used? ------7 2.5. What more can be done to prevent pension scammers operating? ------9 2.6. What more can be done to prevent individuals becoming victims of pension scams?-- 10 2.7. What role should the pensions industry have in preventing scams? ------11 2.8. Is HMRC’s position on the tax treatment of pension scam victims correct ------11 2.9. Are public bodies co-ordinating the response to pension scams?------12

1. Executive Summary 1.1.Introduction 1.2.I welcome the opportunity to contribute to the Committee’s inquiry into pension scams. As I recently concluded successful court action vs my QROPS Pension Trustee, I have been unable to contribute to this enquiry to date. 1.3.I am an ordinary retail investor and the victim of a pension scam, where my two UK Defined Benefit Company Schemes were transferred to a Guernsey QROPS offered by FNB Pension Intl. Trustees in Guernsey. I am the person mentioned in the Phoenix group submission at 2.3.22 as the one “who suffered the loss of her £330,000 pension pot, recently took her trustee FNB International to court in Guernsey.” 1.4.My DB transfer took place in 2011 when I was living overseas and because of the introduction of the QROPS (Qualifying Recognised Overseas Pension Schemes) legislation in the UK in 2006 1.5.Though my transfer took place before the introduction of the “Pension Scam” Scorpion Leaflet in 2013, there was plenty of Pension guidance and regulation in existence relating to Self-Invested Pensions which had been in place since 1994. This did not prevent the disastrous circumstances of my DB pension transfer and the high- risk unsuitable investments my pension funds were invested into. 1.6.My DB Scheme pension transfer should never have taken place as it could never be replaced by an equivalent pension, though I was misled to believe that it would be. Further, I incurred significant financial losses to the pension pot, which was invested into unregulated collective investment schemes, would not have occurred had all the proper regulatory checks been carried out, both by the ceding Trustees in the UK and the receiving Trustee in Guernsey. 1.7.I had worked hard in the UK for over 20 years with two large multinationals, Unilever and Proctor & Gamble to build up the DB schemes, though I was unaware of the benefits I was giving up at the time of transfer. 1.8.In 2011, when working overseas in SE Asia, in Bangkok, Thailand, I was advised to transfer my UK DB pensions by a British adviser in Bangkok, Thailand (PPI Advisory International). PPI Intl. pretended to be a properly licensed and UK qualified firm, knowledgeable about QROPS. They act for large international banks like First Rand Bank S.A and Life insurance companies like Royal Skandia (now Old Mutual Intl, Isle of Man) and Friends Provident. 1.9.PPI Advisory Intl., Bangkok recommended and facilitated my DB pension transfer. PPI advised me that I would have significant tax benefits as I was transferring to a legitimate scheme ‘recognised’ by the HMRC and that I could benefit from passing on the pension benefits to my son, upon my death. I was not aware that they were a sales agent for the Guernsey QROPS Pension Trustee. 1.10 I first became aware that there was a serious problem with my QROPS when one Fund, the infamous LM Managed Performance Fund (Australia), collapsed and went into bankruptcy in March 2013. To my shock, I learnt that this fund was 50% of my entire pension pot and was an Unregulated Collective Investment Scheme. In fact, it was an ‘unregistered’ scheme, not registered even in Australia and targeted expatriates. 1.11I later learnt that my entire pension transfer amount was invested into just three Unregulated Collective Investment Schemes (UCIS), approved by the Pension Trustee in Guernsey, within an Insurance Bond provided by Royal Skandia International/Old Mutual (Isle of Man). All of this was contrary to my stated risk profile. 1.12 Both the Trustee and Old Mutual had terms of Business with the British Unlicensed adviser, PPI Advisory, Thailand. Before this, I had no idea what an Unregulated Collective Scheme was. All of UCIS funds have been frozen for many years and one i.e., the LMMP Fund has completely failed. 1.13 I only became aware in March 2014 that the QROPS Pension Trustee had a duty of care towards me in overseeing my Pension Investments and acting in my best interest. The Pension Trustee had not engaged with me at all till that point when I contacted them to find out what had happened to my pension investment. 1.14 In 2014, I was fortunately connected to a group of some 60 retired expatriates in Thailand, many of whom were British, who had been invested by their unregulated advisers into the LMMP Fund. I learnt that the LMMP Fund was widely sold to British retirees and expatriates as ‘safe as a bank’, with steady growth and low risk as it invested into Australian residential property. 1.15I then began my research and discovery of my pension scam over the next 3 years; I learnt that the LM Fund management company was regulated by ASIC (Australian Securities and Investments Commission) but the LMMPF was not and was in reality totally 'unregistered'. My research revealed a lot of new information on the true nature of the LM fund scam and how British expatriates overseas had been targeted as part of a well-orchestrated international investment scam. 1.16 For three years since the collapse of the LMMP Fund, I made several official complaints to bodies in Thailand, Guernsey and the UK. My initial complaints were to PPI Advisory Intl. Bangkok, FNB Trustees Intl. Guernsey and Royal Skandia Intl., Isle of Man. From the outset, my Pension Trustee denied any responsibility for any negligence on their part or liability for my loss. 1.17 I also made complaints to the Guernsey Regulator, the Guernsey Financial Services Commission (GSFC), the Thai Securities and Exchange Commission (Thai SEC) and various UK bodies such as the Pension Regulator, the Financial Ombudsman and the HMRC. 1.18 All the UK regulatory bodies I complained to did not help me, stating that as I had transferred my UK pension overseas, even though this was done under HMRC legislation, this was out of their jurisdiction. 1.19 The Thai SEC helped respond to my written complaints. They investigated the Bangkok Advisory firm and placed them on an 'Investor Alert' list in July 2014. A criminal investigation was initiated into the activities of PPI Advisory, Thailand and the MD Eric Jordan, which is ongoing. The SEC investor alert and the notice of criminal investigation was helpful to me in my court case vs FNB Trustees, who had had the role of appointing the Bangkok unregulated adviser to the Trust as their investment adviser, as per the QROPS Pension Trust Deed. 1.20 In November 2016, I filed a Civil case in the Royal Courts of Guernsey vs FNB Trustees. At all times I attempted to settle the matter out of court. At all times the Trustee denied their duty of care towards me, as their Pension Beneficiary. Instead, they hired the biggest and one of the top litigators at the most expensive Guernsey law firm (Carey Olsen ) to defend their claim vs me. 1.21 My Civil case was heard at a courtroom trial before Jurats in November 2019 at the Royal Courts of Guernsey, where I represented myself as a ‘Litigant in person’, with the help of a McKenzie friend, as I had no other alternative. To my shock and disappointment, despite all the evidence in my favour, I lost my case at Trial via a Guernsey court judgement delivered on 2nd Dec 2019. The judgement, which is in the public domain, ruled that I had failed to prove that the Pension Trustee had acted with gross negligence or that they were responsible for my loss. 1.22 In December 2019, I faced further financial ruin as the Defendant with their top law firm, Carey Olsen was pressing FNB’s claim for their exorbitant legal costs of over £250,000 against me and said they would come after my home in the U.K. 1.23 In December 2019 I filed an appeal against the Guernsey Royal Court decision. The Appeal was heard by an eminent panel of UK judges in July 2020. The Appeal Court overturned the decision of the Royal court and ruled that the Pension Trustee had been grossly negligent in their actions and caused me great financial losses as a consequence. 1.24 As was referred to in other submissions made to this enquiry, apart from the stress and trauma this experience has vested on me for the last so many years, this Pension scam nearly destroyed any financial security in retirement that I had worked so hard for. Despite my win in court, I have no hope of an equivalent pension to my DB schemes.

2.Question Responses

2.1 What is the prevalence of pension scams? 2.1.1 The true scale of this is not known as has been submitted by various expert parties to this enquiry. That it is huge and runs into billions of £ and is ongoing is a cause for great concern. It does not engender confidence in the Pensions industry and the Legislation around it.

2.1.2 I would observe that though there is an increased focus on this area, especially since the ‘Scorpion’ leaflet initiative in 2013, the problem is more systemic, and a leaflet alone cannot prevent this from happening. Also, any efforts primarily refer to resident British Pension beneficiaries.

2.1.3 There is little attention paid to British international pensions. The widespread fraud and scamming taking place in Pension transfers for British retirees overseas i.e QROPS & SIPP’s remains largely unaddressed and continues unabated. This is where pension scammers have operated to a greater extent and continue to do so, operating outside UK FCA regulation.

2.1.4 In my research, I learned that there was a ‘gold rush’ in 2011 among overseas Pension Trustees and unlicensed advisers to encourage British expatriates to transfer their pensions overseas to jurisdictions such as Guernsey, Gibraltar and Malta. I read that in 2011/2012 Guernsey had a 25% share of all overseas Transfers of British pensions, highlighting how this lucrative opportunity was seized upon.

2.1.5 As stated in the submission of the Phoenix group (and was my experience), "only a very small percentage (less than 5%) of transfer requests exhibit some form of warning signs of a potential scam, but the volume of transfer requests which are processed is considerable and equates to hundreds of millions of pounds. The fact that the vast majority of transfers are made to legitimate and well- established schemes should not disguise the scale of the issue and the nature of the risk to UK pension scheme members."

2.1.6 I appreciate the expanded definition of a pension scam in the government definition of a pension scam which is as follows: “The marketing of products and arrangements and successful or unsuccessful attempts by a party (the “scammer”) to: • release funds from an HMRC-registered pension scheme, often resulting in a tax charge that is not anticipated by the member • persuade individuals over the normal minimum pension age to flexibly access their pension savings to invest in inappropriate investments • persuade individuals to transfer their pension savings to invest in inappropriate investments where the scammer has misled the individual about the nature of, or risks attached to the purported investment(s), or their appropriateness for that individual investor.”

2.1.7 My case falls into the second and third part of the definition provided by the government, though I was well below the minimum pension age and shortly to return to the UK. I should never have been advised to transfer my UK DB Pension in the first instance.

2.1.8 I am one of the those that the FCA press release of 8 November 2019 (“22 years of Pension savings gone in 24 hours”) exemplifies. The release notes that those with a university degree are 40 per cent more likely to accept a free pension review from a company they’ve not dealt with before and are 21 per cent more likely to take up the offer of early access to their pension pot.

2.1.9 The regulators have also warned that "overconfidence" can lead to savers missing signs of a scam. Almost two-thirds of people felt "confident" making pension decisions with a similar proportion saying that they would trust someone offering pensions advice out of the blue. Those who consider themselves smart or financially savvy are just as likely to be susceptible to being scammed. That again was me.

2.2. What are the current trends in pension scams?

2.2.1 In my view, though Pension freedoms are referred to as introduced in 2015 in the UK, many like me were scammed into transferring to a QROPS or a SIPP, before 2015. This appears to be overlooked by the UK authorities and we have been left out in the cold to fend for ourselves, as we are no longer under the purview of any UK regulator.

2.2.2 The PSIG Code of Good Practice also highlights the alarming issue of what has been termed “international Self Invested Personal Pensions (UK registered SIPPs)”. Members seeking such transfers (including to QROPS) are frequently resident overseas with the transfer being facilitated through intermediaries and advisers outside the UK. My own experience was that UK pensions were and are a particular target, often by British ex-pat advisers who rely upon ‘cultural’ connections to scam their victims.

2.2.3 The majority of pension scams I have come across in QROPS victims were investment scams with the investments in unregulated, high-risk, overseas investments(UCIS’s). This is a type of higher-risk investment that has been the subject of warnings by the FCA and not suitable to retail investors, which is ignored by overseas Trustees and investment platforms, e.g in Guernsey and the Isle of Man, who claim to have high standards of financial regulation, even higher than the U.K

2.2.4 UCI’s are high- risk, unsuitable investments which invest in alternative finance, litigation finance, property developments and even student accommodation in the UK. It is not possible for an ordinary retail investor to know the differences and this is where the financial industry including fund managers and Trustees with their advisers fail us. A case in point is the unregulated Mansion Student Accommodation Fund, which is offered by Dartmoor Capital UK. Dartmoor Capital is registered and regulated in the UK, but their high-risk unregulated Fund (Mansion Student Accommodation) was not.

2.2.5 My experience of QROPS has been that the scams also take the form of investments in more conventional funds but within an unnecessarily complex structure usually featuring the purchase of structured notes or investment bonds sold as tax-efficient 'wrappers' which hide a myriad of fees and charges These are used to pay unlicensed brokers and salesmen posing as independent advisers.

2.2.6 Overseas investment bonds such as the Executive Redemption Bond offered by Old Mutual International (Quilter) are common within QROPS and are provided by financial giants such as Old Mutual, Friends Provident, Royal London and Generali. This “fractional scamming” or “skimming” sees multiple entities taking a cut and the value of the underlying investments can be destroyed. All these exist to generate hidden commissions to their sales agents and intermediaries to the detriment of the member.

2.2.7 My Pension was and is held in an Old Mutual/Quilter wrapper which offered investment into high-risk funds which were “entirely inappropriate for unsophisticated investors” like me and over £40,000 has been leached out of my Pension by hidden charges since inception, used to pay the unlicensed adviser who acted as OMI’s sales agent.

2.2.8 The complexity of QROPS structures and scams models poses significant challenges for the pension beneficiaries to understand what trap they have fallen into and identifying the numerous parties which can be involved. And whom they could issue a claim against.

2.3 What are the common outcomes of pension scams for perpetrators and victims?

2.3.1 The most common outcome for Pension scams for victims is complete financial ruin and no pension to fall back on when they need it. They then have to fall back on the state for benefits or live in penury.

2.3.2 The most common outcome for perpetrators is that they appear to escape censure and often disappear to then reappear elsewhere or rebrand themselves like 'a snake shedding its skin', to distance themselves from past scandals.

2.3.3 As has been reported in other submissions to this enquiry, my experience from discussions with other victims is that many victims are reluctant to admit that their investment was a scam or are unaware that their investments were/are unregulated, high risk and unsuitable or excessive fees are being charged. Thereby they are not aware that they were scammed for many years until they try to access their pension savings. The potential ' time bomb' where many then discover they have no pension or that they have huge negative balances, due to the excessive charges levied on them within their pensions.

2.3.4 British expatriates have spent years paying their UK taxes and have earned workplace pensions from the U.K, transfer under U.K regulations and fall victim to scammers from Britain who understand the U.K financial regulatory loopholes well. Tragically, they have no one they can turn to when they are victims of a pension scam. The same UK regulators who create the transfer legislation in the first instance, are not interested, and the local regulators are ineffective or prefer not to take any serious action.

2.3.5 I took my complaint to the Guernsey Financial Services Regulator( GSFC), not once but several times. To my disappointment, the Guernsey Financial Services regulator denied me help on every occasion. The GSFC responded by saying discussions between them and their licensee (my Pension Trustee) were ‘confidential’.

2.3.6 In 2015, spearheaded a group complaint on behalf of a group of 10 Guernsey QROPS victims with similar losses to the Guernsey regulator. Yet again they did not take any action or share the results of any progress of the complaint.

2.3.7 The Bailiff and Jurats at the Guernsey Royal Court too appeared to have adopted this ‘protectionist’ approach and ruled against me at the November 2019 trial.

2.3.8 I finally got justice by going through a prolonged and expensive Appeal process, where I had to borrow money to initiate further legal action. I finally obtained a successful judgement in my favour before three UK Judges of the Appellate court.

2.3.9 There are other cases of international Ombudsman determinations and potential litigations as many overseas Trustees do not undertake sufficient due diligence on the investments which are invested in via their QROPS/SIPP offerings. A case in point is the Maltese Arbiter case vs Momentum Pensions, Malta.

2.3.10 Information on scams and case precedents or ombudsman or court judgements is poor and hence the victims who want to pursue action vs the perpetrators, struggle to find examples that can help them.

2.4 How are existing enforcement tools being used?

2.4.1 I believe there is little awareness among the pension beneficiaries that there are any enforcement tools available if something goes wrong. 2.4.2 U.K Pension Legislation relating to QROPS does not appear to be there at all. By comparison, there is much more available on Pension Opt-outs and guidance on SIPP's.

2.4.3 There are insufficient checks and balances in place as to the suitability of receiving overseas Pension Schemes and responsibilities of the receiving overseas Trustees to adhere to a common code of conduct.

2.4.4 After I initiated court action, I became aware of new facts from my court disclosure documents, as to the inception of my QROPS. I learnt that in my case, not even the bare minimum of any checks was carried out before transfer on my HMRC ‘recognised’ QROPS Pension Trustee in Guernsey to identify any concerns, nor on the regulatory status of the unlicensed adviser that was appointed to facilitate the pension Transfer. The only information asked for from the receiving Trustee in Guernsey was their ‘HMRC Registration document’ as a ‘recognised’ QROPS. This is more than likely what happened in most QROPS transfers before 2013.

2.4.5 Though Project Bloom and Action Fraud are mentioned here in the enquiry, these are initiatives which are not widely known to victims of pension scams and hence of little help to them. They do not even appear to have international pensions within their remit.

2.4.6 I am not aware of any enforcement tools being used to help British expatriates who have lost their pensions by transferring overseas under HMRC legislation, even though the receiving Pension schemes were on the HMRC approved list.

2.4.7 Around March 2012, most Guernsey QROP’s were inexplicably removed from the HMRC recognised list, no reasons were provided to pension transferees. This was not even communicated to those ( like me) who had already transferred to a Guernsey QROPS, by any UK authorities. Guernsey Trustees played this down as well, implying that this was a temporary measure. This was not so. Guernsey QROPS remains off the HMRC ‘recognised list’ remains to date. Due to the uncertain position of Guernsey QROPS, people like me cannot transfer what remains of my pension in Guernsey to another provider, without incurring a tax charge. People like me have been hung out to dry by the UK authorities.

2.4.8 My experience of complaints made to the Financial Ombudsman, the HMRC and the Pensions Regulator was that they were not interested and did not want to engage with me.

2.4.9 I took my complaint to my UK MP, along with a few other QROPS victims’ cases. She brought the matter to then Pensions Minister. The response from the UK Treasury was one of sympathy but also that the HMRC does not ‘approve’ any overseas schemes, merely ‘registers’ them and they could not help me. Where does this leave people like me?

2.4.10 The Pension industry appears to condone definitive criminality. For example, an overseas adviser acting without the appropriate pension transfer permissions would be considered an offence under the Proceeds of Crime Act 2002 (POCA) in the UK. But not so in an Overseas Pension. This issue is rife in the transfer of pension overseas and goes unnoticed. It is also not common for the scammers to use fraudulent qualifications on their website and Linked In Profiles, such as qualifications from the Chartered Institute of Securities and Investments (UK). As was in my case.

2.4.11 I note that Quilter had also submitted to this enquiry, though they are the providers of these toxic investment Bonds and platforms to sell Ponzi schemes like the LMMPF, sold overseas to British expatriates but not meant for sale to UK residents. They use unlicensed advisers like PPI Intl. as salesmen for their toxic investment bonds.

2.4.12 Several class actions are attempting to bring a claim vs. Life Insurers including the multi-million-pound class action initiated by a group of UK and international investors against Quilter International and Friends Provident International. Several of the claimants are QROPS claimants, with circumstances very similar to mine, with their QROPS held with Guernsey-based Pension trustees. Unlike me, many of the ex-pats are now retired and have lost their life savings and now have no pension at all.

2.4.13 There appears to be no coordinated effort or public knowledge of enforcement systems or results, that could help pension victims who seek help from the UK authorities.

2.4.14 It appears that the only option open to victims of Pension scams like me, albeit under HMRC approved legislation, appears to be exorbitantly expensive individual legal and court action. This is not something that most victims have the will, energy, knowledge or means to pursue.

2.5. What more can be done to prevent pension scammers operating?

2.5.1.1 I believe that prevention is the best solution and UK legislators and the pension industry need to act together.

2.5.1.2 Improving regulation and adherence to a code of conduct by Pension Trustees is crucial and not just restricted to Pension Trustees in the UK but also in those jurisdictions where the UK statutory right to transfer applies to. This is the required to protect British pension beneficiaries who have paid their taxes for years in the U.K; for overseas Trustees to act in their best interest.

2.5.1.3 QROPS is a disastrous piece of legislation that has opened the door to scammers and if QROPS cannot be regulated, they should be done away with altogether.

2.5.1.4 In any event, the FCA should develop and publish a framework of legislation for QROPS and International SIPPS, just as there is for UK Onshore pensions to ensure compliance to the required due diligence checks and compliance requirements for retail investors. 2.5.1.5 A special warning to potential transferees should accompany any transfer requests to overseas pensions. Overseas pension requests should require extra diligence by way of licensing check for investment advisers and diligence checks on Pension providers.

2.5.1.6 Restrict the marketing of Unregulated Collective Investment schemes ( as per the FCA warnings) to investors through Offshore pension schemes and ‘tax wrappers’ and investment platforms such as the Friends Provident Reserve Bond and Old Mutual Intl. Bonds.

2.5.1.7 The FCA should work with the Regulators in the UK Crown Dependencies, i.e. Guernsey and the other Channel Islands, Isle of Man etc. to align on similar levels of Trustee compliance and due diligence as legislated by the FCA on UK pensions.

2.5.1.8 Unfortunately, there will always be scammers and unsuspecting victims, but raising the public’s awareness and Increased market intelligence across borders will go a long way to curtail the activities of scammers and restrict the number of scams that take place.

2.5.1.9 I fully support that a "Pension Scams Intelligence Database" should be developed as part of an international intelligence-sharing framework. An industry database on the extent of scams and naming of scammers, whether they be unlicensed advisers or rogue pension Schemes available to the public as a searchable register.

2.5.1.10 International co-ordination of a Pension Scams database and a framework for enforcement. As an example, the FCA engages with international regulators through the IOSCO, the International Organization of Securities Commissions (IOSCO). The Financial Conduct Authority (FCA) chief executive Martin Wheatley co-chairs a Task Force on Financial Market Benchmarks (the Task Force), which has published its proposed Principles for Financial Benchmarks (the Principles) for consultation.

2.5.1.11 Through the IOSCO, overseas regulatory bodies such as the Thai SEC could be urged to bring criminal prosecution vs the Unlicensed Advisers, acting as sales agents for rogue pension providers and Fund Managers selling high-Risk unsuitable investment funds directly to unsuspecting Retail Investors, many of whom are British. These scammers are still operating outside regulatory frameworks and siphoning off transfers from British Pensions into high-risk funds, leading to huge financial losses for British Retirees.

2.5.1.12 The same searchable public database should also include a warning about rogue fund managers who, while using the respectability and 'cover' of being regulated in the UK, offer unregulated products to the same investors in an offshore tax haven such as Guernsey and the Isle of Man, or in any numbers of overseas jurisdictions where pension transfers are being made to, such as Gibraltar or Malta or the Middle East. 2.6. What more can be done to prevent individuals becoming victims of pension scams?

2.6.1 More than the 'tax-efficient' wrapper or the investment fund itself ( which is often argued as necessary and useful if applied properly), the complete delegation of responsibility to the retail customer plus the lack of regulatory oversight is the enabler for such scams.

2.6.2 I would recommend the introduction of FCA regulatory oversight on QROPS transfers, with the default being that any Pension Transfer of a UK Pension to a QROPS remains under the regulatory oversight of the FCA, at least for the first 3 years. Treat QROPS just like any other UK onshore pension in terms of regulatory oversight, at least for 3 years.

2.6.3 As most of the scam investments are made at the inception of the QROPS and immediately following the transfer, scams can be significantly reduced if 2.6.2 is implemented. Scammers will be less able to transfer to unsuitable complex structures and unregulated collective investments ( UCIS), as happened in my case and thousands of others. After 3 years, there should be an opt-out from FCA regulatory oversight, for the member to exercise if they wish.

2.6.4 Any pension transfer from a DB scheme should set off alarm bells and be warned again. It not simply be a matter of simple statutory right, with no checks in place.

2.6.5 A further mandatory requirement that only ‘approved’ persons with proper pension transfer qualifications should be able to recommend and effect a DB pension transfer.

2.6.6 A mandatory requirement for actuarial calculations within a professional Pension transfer suitability report. The pension transfer report should defined to FCA standards and signed off by the Ceding and receiving Trustees. This report should be explained by a qualified pension actuary to the Beneficiary and their total approval obtained before the transfer of the pension.

2.6.7 A further mandatory requirement that only approved persons with pension transfer qualifications should be able to recommend and effect a DB pension transfer.

2.6.8 There is an urgent need for public education about tax, pensions and investments and greater awareness about pension scams and how easily they can happen to anyone. Even educated people who may consider themselves to be financially savvy.

2.6.9 Build public awareness about the risks of pension transfers, especially DB Transfers. As already well highlighted, the statutory right to transfer and the ‘overconfidence’ combined with a lack of knowledge about Pension benefits being lost, is an open goal for scammers.

2.6.10 Restrict public advertising campaigns to transfer pensions easily as this is only making the problem worse. As recently as December 2020 and even now, there is a large scale campaign to be 'Pension Confident' by someone called 'Pension Bee', which claims to do all this through one easy mobile app; thereby further perpetuating the illusion that taking control of pensions is so easy to do for the average person. This is a false promise.

2.6.11 Improved media coverage, unlike at the moment wherein general reporting on QROPS and SIPP’s is poor and of little interest to mainstream British media.

2.7. What role should the pensions industry have in preventing scams?

2.7.1 The pension industry has to be at the heart of the fight and the first line of defence against the scammers, as has been submitted by the PSIG.

2.7.2 An indemnity fund/insurance scheme for victims of pensions contributed to by pension providers should be a mandatory provision to cover legitimate personal losses due to scams. This could serve to protect the customer, align the providers' interest with that of the customers and lower the burden on regulators & courts.

2.7.3 In reading the other submissions made to this enquiry, I found the insights and recommendations by the Phoenix group and the work being done by the PSIG (Pension Scams Industry Group) including the Code of Good Practice for Trustees and Pension Providers valuable. I feel confident if their recommendations were implemented, what happened to me could be avoided.

2.8. Is HMRC’s position on the tax treatment of pension scam victims correct?

2.8.1 No.

2.8.2 For victims of pension liberation (the early release of cash from the pension), not only do victims suffer at the hands of the scammer, there is the additional burden of punitive tax charges (typically 55% of the transfer value) which are levied by HMRC.

2.8.3 I support the sentiments expressed by Margaret Snowdon OBE, Chair of PSIG, that it is grossly unfair for the many innocent victims of such scams to be pursued for tax charges in this way. I believe Ms Snowdon has written to both the Chancellor and to Mel Stride MP, Chair of the Treasury Committee, to seek a change in the law to stop this practice. 2.8.4 For victims of scams, typically facilitated by organised crime, it seems entirely unfair that these people are then subjected to additional tax charges. Many have no means of paying them and it does feel like a ‘double whammy’ having already suffered at the hands of the scammer. 2.8.5 Tax amnesty for victims before February 2014, including those that have transferred pensions overseas proposed by Ms Margaret Snowdon is an initiative which I would wholeheartedly support.

2.9. Are public bodies co-ordinating the response to pension scams? Not to my knowledge or based on my experience. My experience of public bodies and authorities has been one of lack of interest and knowledge about overseas pensions transfers and especially about QROPS.

CONCLUSION In conclusion, coordinated regulatory oversight is the key to preventing pension scams. In addition to my recommendations earlier, I wholeheartedly support the focus this enquiry is bringing to this large scale problem of Pension Scams and I await concrete and positive outcomes.

I would additionally plead that any improvements and regulatory changes should also apply to British Pensions transferred overseas, such as QROPS and other international Pensions, transferred before 2013 and since.

January 2021