A Freedom of Information (FOI) request has revealed that less than 7% of reported pension frauds were passed to police for investigation in 2019.
Wealth management experts Quilter found that just 6.6% of cases were forwarded for investigation and is now calling for financial harms in the Online Harms Bill going through parliament.
The FOI request revealed just 26 of 394 reports to Action Fraud in 2019 were sent on to police, but Quilter explained that pension scams are ‘extremely complex’.
The complexity often requires a large number of officers and resources to investigate them so police are forced to prioritise cases they believe could result in a successful prosecution.
Figures for 2020 show that of 161 reported scams just 24 are under investigation.
Quilter are now asking for measures to be introduced to be introduced to tackle some of the ways that scammers target their victims online.
In particular they want scam adverts, fake websites and other financial harms to be included in the planned legislation.
Considerable economic uncertainty
Quilter spokesman Jon Greer said: “We are entering a period of considerable economic uncertainty, and one in which generating a decent return on your investments will be extremely challenging.
“This is the ideal environment for scammers to thrive and it is no surprise to see huge amounts of money still being lost each year at the hands of criminals.
The fact that it is so hard to investigate and prosecute pension scams is effectively handing pension scammers a get out of jail free card.”
The firm believe it is vital that action is taken to resolve the issues with search engines and social media which are the main ways that scammers contact their online victims.
Said Mr Greer: “Pension scams and other investment frauds are extremely complex, they can span multiple jurisdictions, and can often go uncovered for years before the victim realises their money is gone.
This all makes investigating the scams incredibly time consuming and expensive, which is why the police have to prioritise those few cases where they have a chance of success.
“The legal deterrent appears to be ineffective, so more must be done to prevent scammers from operating, and to do this we must cut the line of communication between the scammers and their victims: search engines and social media.
“The government have taken action on unsolicited pension calls with the ban on cold calling, but scammers are sidestepping the legislation and moving online.
“Movement on the regulation of search engines and social media platforms has been painfully slow and the regulation has failed to keep up with the evolution of scammers.
The government has a perfect opportunity to bring the regulation into the 21st century by including financial harms within scope of the forthcoming Online Harms Bill.
“In doing so, search engines and social media providers will be legally required to remove suspected scammers immediately on notification, and not allow them to operate in the first place, or face sanctions from the new regulator.”
The Quilter report also noted that since 2017, £30,857,329 has been lost to pension scams, but that figure is seen as being the tip of the iceberg as many scams go unreported.
Action Fraud have just announced that coronavirus scams have hit the £5 million mark since February.