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Six arrested as part of auto-enrolment 'fraud' investigation


Six people have been arrested as part of an "ongoing criminal investigation" into fraud allegations connected to automatic enrolment and underpayment of workers, police have reported.

The arrests, which took place in Derby and Nottingham, were made as part of a joint operation involving Derbyshire and Nottinghamshire Police, the Pensions Regulator and the Employment Agency Standards Inspectorate. Search warrants were also executed at two locations, police confirmed.

"It is impossible to tell what the precise circumstances of this alleged fraud are from the limited information provided, or over what period it has been taking place," said pensions litigation expert Ben Fairhead of Pinsent Masons, the law firm behind Out-Law.com. "However, it is perhaps unsurprising to hear that auto-enrolment has eventually led to a suspected fraud given recent news about the number of whistleblowing reports received by the Pensions Regulator."

"The steep rise in numbers of employers enrolling staff under auto-enrolment rules going forward might well lead to more confusion and conceivably potential exploitation of individuals' money. As with the new Freedom and Choice pension flexibility rules, where there are novel changes made to pension law leading to the movement of large sums of money in and out of pension pots, fraudsters will inevitably be attracted and take advantage of any perceived weaknesses in the system," he said.

The number of whistleblowing reports received by the Pensions Regulator increased by one third, from 1,497 in 2013/14 to 1,985 in 2014/15, according to its most recent figures. However, this corresponded with an around 200% increase in the number of employers legally required to automatically enrol their staff into a qualifying workplace pension scheme over the same period, it said.

Nottinghamshire Police confirmed the arrests of three men, aged 28, 37 and 38, and a 31-year-old woman at business premises in Derby city centre; and a 35-year-old man at a business address in Nottingham. A 31-year-old woman was also arrested after voluntarily attending a police station in Derby, it said.

All the arrests were for suspected fraud offences, the police force said.

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