Ministers urged to act now to stop pension scam adverts

The Work and Pensions Committee said scammers had been allowed to advertise due to a lack of regulation while tech giants "line their pockets".

In a new report it said legislation was needed urgently to stop scammers from profiting from a multibillion-pound industry and protect pension savers.

The report said people saving for pensions had been at a much greater risk of fraud since pension freedoms were introduced for the over-55s in 2015.

The Pension Scams Industry Group estimates a total of £10 billion has been lost by 40,000 people to pension scams in the last six years.

And the report added that the situation is likely to be getting worse, with the coronavirus pandemic providing scammers with new opportunities.

The committee said that pension scammers have moved online, with regulators appearing powerless to hold search engines and social media to account for hosting scam adverts.

Tech firms including Google, it said, were accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the committee described as “immoral”.

It called on Ministers to rethink its decision to exclude financial harms from the Online Safety Bill, and use it to legislate against online investment fraud.

West Bromwich West MP Shaun Bailey, who sits on the committee, said: “As someone who has previously worked in the financial sector, I find this report extremely alarming.

"It is clear that the Government needs to do more to look at the legislation surrounding online safety and, more widely, pension freedoms to tackle scammers and fraudsters.

"In addition, the immoral practices of the big tech companies such as Google, who are accepting payments to advertise scams and then further payments from regulators to publish warnings, is a matter of real concern.

"The practice of scamming individuals, such as my constituents in Wednesbury, Oldbury and Tipton, should be not be a money-making exercise for these tech giants.

"I look forward to the Government’s response on this report and the steps they plan to take in protecting the lifelines for many after retirement."

The report also called for the multi-agency task force set up to tackle pension fraud to be strengthened, and also urged The Financial Conduct Authority to "raise its game" and publish information about its enforcement action.