The Pensions Regulator (TPR) and the Pension Scams Action Group have developed an artificial intelligence (AI) tool to help identify and shut down websites that are attempting to defraud people of their pension savings.
The two agencies have been using a machine learning algorithm and inputting real-world data to help predict websites that could be scamming people.
So far, TPR and the Pension Scams Action Group (PSAG) say they have reviewed 830 websites, taken down 29 that were “high risk”, and made 94 referrals to other agencies such as City of London Police and the National Economic Crime Centre.
According to Action Fraud, the government’s fraud reporting service, more than £17.7m was lost to pension scams in 2023, with an average loss of £46,959 per person. Last year, more than £649m was lost to investment fraud.
However, recent TPR research found that only 11% of defined benefit and defined contribution pension schemes correctly said scams should be reported to Action Fraud, despite “clear guidance” to do so.
Paul Sweeney, PSAG business lead at TPR, said: “The threat of pension scams is ever evolving. To stay one step ahead, we are using every tool at our disposal to beat the fraudsters.
“Scammers often exploit technology to deceive victims and steal their pensions. We are turning the tables on them by using technology to detect and prevent fraud by removing malicious websites.
“Alongside this, we and our PSAG partners are collaborating more closely than ever, enhancing the intelligence we hold and disrupting emerging threats from scammers.”
Replacing and upgrading Action Fraud
The City of London Police plans to introduce a new fraud reporting system later this year to replace Action Fraud, known as the Fraud and Cyber Crime Reporting and Analytics Service.
Chris Bell, service delivery director at City of London Police, said: “This system will result in fundamental service improvements to how intelligence is gathered nationally from multiple sources and speed up the analysis of reports, and how quickly they are sent to police forces for investigation.”
TPR’s Sweeney added that it was still “essential” for pension scheme trustees to report frauds and scams to Action Fraud “so we can build our national intelligence picture”.
The Pension Scams Action Group includes representatives from TPR, the Department for Work and Pensions, the Treasury, the Financial Conduct Authority, the Money and Pensions Service, the National Economic Crimes Centre and the Pension Scams Industry Group.
