Out-Law News 2 min. read
04 Feb 2015, 4:49 pm
The website, which was using the 'pensionwisechoices.co.uk' domain name, was taken down by its owners on Monday afternoon following pressure from officials, according to the Financial Times, which first reported the story. It said that the domain name had been registered on 13 January, the day after the Treasury announced the official name of the service which will deliver the 'guidance guarantee' element of April's pension reforms. The site's owners told the paper that it had been set up to refer investors on to specialist pension advisers.
The Pension Schemes Bill, which is currently before the UK parliament, will make it a criminal offence for anyone to pass themselves off as affiliated with the Pension Wise service. In the meantime, the site has been reported to Action Fraud and the Advertising Standards Authority, the Treasury said.
"It's completely unacceptable for a company to deliberately present themselves in a way that could confuse people into thinking they are getting independent guidance when they aren't," a Treasury spokesperson told Out-Law.com. "We want to ensure consumers are not misled and that Pension Wise is a reliable and trusted brand."
Pension litigation expert Ben Fairhead of Pinsent Masons, the law firm behind Out-Law.com, said that the case "highlights the risks" that will come with what the government is calling the most far-reaching reforms to the pensions regime since its original introduction.
"At best, there is scope for confusion about who is actually responsible for providing 'official' guidance; at worst, there is the prospect of those approaching retirement falling prey to the next wave of pensions fraud," he said.
"Unscrupulous individuals will have spotted the opportunities as soon as the new rules were announced last year – sadly it will prove easier for fraudsters to get control of sizeable pension pots as a result of the rule changes than it has been to date. There will be a need for increased vigilance and greater public awareness to ensure a careful path is trod between avoiding scams but, equally, not negating the benefits of the new freedoms for those who do wish to take some investment risk," he said.
From April, members of defined contribution (DC) pension schemes will have more freedom to access their pension savings in any way that they wish from the age of 55, without facing heavy tax penalties or necessarily having to purchase an annuity. This new freedom will be backed by a right to guaranteed free and impartial guidance at the point of retirement.
The government announced last month that the new service, which will be accessible online, by telephone or face to face, will be called 'Pension Wise'. It is already accessible online at gov.uk/pensionwise. Face to face guidance will be provided by the Citizens Advice Bureaux in Scotland, Northern Ireland and England and Wales, while telephone guidance will be provided by the Pensions Advisory Service. All official delivery partners will use the Pension Wise name and branding.
The Financial Conduct Authority (FCA) will not formally regulate the designated providers, but will set minimum standards to be followed when guidance is provided. It is also able to take action against websites or firms that breach its rules and attempt to scam consumers. Once the Pension Schemes Bill receives Royal Assent, imitating the Pension Wise name and brand could lead to fines or one year's imprisonment for firms or individuals found guilty of the new offence.