Financial Guidance and Claims Bill [HL] - Report (1st Day)

Part of the debate – in the House of Lords at 6:45 pm on 24th October 2017.

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Photo of Baroness Buscombe Baroness Buscombe The Parliamentary Under-Secretary of State for Work and Pensions 6:45 pm, 24th October 2017

My Lords, I thank the noble Lord, Lord McKenzie, for tabling the amendment. I think we can all agree that raising people’s awareness of fraud and scams relating to financial products is an important matter, and one where the single financial body can, and should, play a role.

All the existing services—the Money Advice Service, the Pensions Advisory Service and Pension Wise—provide information and guidance about fraud and scams and take their role in that seriously. The Pensions Advisory Service—TPAS—has several regularly updated webpages dedicated to pension scams awareness. These provide clear and simple messages warning people to be vigilant and include more detailed information and guidance on, for example, how to spot a scam, how to protect your pension from scams and what to do if you think you have been, or are being, scammed. In addition, TPAS supports a dedicated “identifying a pension scam” tool on its website. It also suggests that people check with it first before proceeding, including by telephone.

Similarly, Pension Wise provides information on its webpages and guidance as part of its telephone and face-to-face sessions on how to avoid a pension scam. This includes information on language commonly used by scammers, copycat websites, bank details scams and how to protect yourself.

The Money Advice ServiceMAS—provides broader information on scams that try to make people part with their money. Its website contains information covering not only pensions but identity fraud, computer software service frauds, phishing, telephone fraud and vishing, boiler rooms and advance fee fraud. MAS updates this information as new scams come to light.

All the existing services signpost to organisations—for example, Action Fraud, the Financial Services Register and the Financial Conduct Authority—that can help people who think they may have been a victim of a scam.

The messages given out by the existing services are straightforward: scammers can contact people over the phone, by email or by text, or might even show up on their doorstep. Scammers are clever, using flashy websites and marketing materials to lure people in. One should never be rushed into making a decision about pensions or savings; if an offer sounds too good to be true, it probably is.

We fully expect the new body to continue this important role and to raise awareness of fraud and scams as part of both its money guidance and pensions guidance functions, and through observing its objectives. The amendment tabled by the noble Lord, Lord McKenzie, would add the requirement to the body’s strategic function. It is an important point to make that the single financial guidance body cannot effectively raise awareness of fraud and scams on its own. Instead, raising awareness of fraud and scams should be one issue that the body develops and progresses through its national strategy in co-operation with others in the financial services industry—including pension providers —the devolved authorities and the public and voluntary sectors.

Scams affect people no matter their age, location or levels of saving, and scammers are becoming ever more sophisticated, so people need to know what to look out for. The body and its strategic partners need to work together to find ways to improve people’s awareness of scams and how together they can address them. However, this matter can already be addressed by the strategic function. It is unnecessary to add to the existing elements of the national strategy, as it cuts across all three and in particular forms part of improving the financial capability of members of the public.

The noble Lord, Lord McKenzie, asked what is happening now given that it will take time for the body to come to fruition. I hope that I laid out in responding to the amendment all that is being done at the moment. One reason for our not even naming the body yet is that we want to avoid it being scammed and copied by somebody else. I trust that the noble Lord is reassured that all is being done that can be done and that the body with its strategic partners will take seriously the matter of raising awareness of fraud and scams. I urge him to withdraw his amendment.