Introduction

Pension scams are getting increasingly sophisticated and pose a significant threat to the security of people's pensions and their retirement plans (see also our previous blog, Pension scams: TPR and how best to avoid scams).

What is a pension scam? Essentially, we are referring to a situation where a pension saver is contacted by a fraudster which may result in that saver losing some or all of their pension savings. According to the Pensions Regulator's (TPR) guidance, the common signs of pension scams include:

• phrases like "pension liberation", "loan", "loophole", "savings advance", "one-off investment" and "cashback";
• higher returns, with guarantees you can get better returns on your pension savings;
• help to release cash from your pension even though you are under the age of 55, with no mention of the tax bill that can arise;
• high pressure sales tactics, with time-limited offers to get the best deal;
• using couriers to send documents, who wait until they are signed;
• unusual investments, which tend to be unregulated and high risk, and may be difficult to check ownership or even whether the investment exists;
• complicated investment structures, where it is not clear where your money will end up; and
• fixed-term pension investments which often mean people do not realise something is wrong for several years.

Action Fraud, the current fraud and cybercrime reporting service operated by the government, has reported that £17.7 million was lost to pension scams in 2023, with an average loss of £46,959 per person.

As explained by TPR, awareness and education around the warning signs of a pension scam are vital in helping protect savers' retirements. They also encourage that, if a scam is suspected, it is reported to the authorities so that it can be investigated, such as to Action Fraud in England and also potentially to TPR or the Financial Conduct Authority (FCA).

This article will look at two recent developments which seek to tackle the threat that scammers pose to people's pension savings. Firstly, TPR in conjunction with the Pension Scams Action Group (PSAG)¹ have developed and are seeking to use an artificial intelligence tool (AI Tool) to uncover and tackle fraudulent websites. Secondly, the City of London Police has plans to replace and update Action Fraud with a new reporting service to be known as "Report Fraud" later this year.

TPR and PSAG develop AI Tool to detect pension scam websites

In a press release issued on 9 April 2025 entitled Pension scam fighters stand united as artificial intelligence takes the fight to fraudsters, Paul Sweeney, the PSAG Business Lead at TPR, commented that: "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."

In the above-mentioned press release, TPR announced that the new AI Tool it has developed with the PSAG uses machine learning and algorithms to spot scam sites early and has already been used by the PSAG to review 830 websites, take down 29 high-risk sites and make 94 referrals to partner agencies. The PSAG collaborates with the National Cyber Security Centre (NCSC) and other authorities to investigate and remove malicious content. The NCSC has the power to investigate and remove scam websites, contributing to the PSAG's efforts. 

The introduction of "Report Fraud"

Later this year, the existing fraud reporting service Action Fraud will be replaced by Report Fraud, a new reporting service which will be part of the fraud and cybercrime reporting service. Chris Bell, the Service Delivery Director at the 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."

It is hoped that the improved functionality of Report Fraud will result in better outcomes for the victims of pension scams. If a pension scam is reported and investigated more quickly, there is thought to be a greater likelihood that the authorities can work to recover any stolen funds with a view to returning them to the victim or using them for the purposes of providing the victim with compensation.

Conclusion: the importance of technological advancements, enhanced communication, collaboration, education and continued reporting

It is hoped that the new AI Tool and the introduction of Report Fraud will enable more effective, joined-up strategies to be implemented for the purposes of preventing, reporting and combatting pension scams, and for catching and prosecuting the perpetrators.

It is also imperative that the pensions industry, together with TPR and the FCA, continue to collaborate in educating pension savers and all those involved in the pensions industry as to how best to combat pension scams. The PSAG coordinated by TPR is at the forefront of the battle against pension scammers.

For more information, we would recommend reviewing the recent TPR and PSAG Fighting pension fraud webinar 2025 (together with the slides from the presentation (in March 2025)), which provides helpful insights from experts in the pensions industry as to how to strengthen defences against pension scams, by means of technological advances (including artificial intelligence) and enhanced collaboration and communication. It notes, in particular, that reporting of data is still key and that it is essential that pension scheme trustees should continue to report frauds and scams to Action Fraud (and Report Fraud in due course) for the purposes of building up intelligence in the battle against scammers and keeping the public aware of the risk of becoming a victim of a scam.

1. Its core members include TPR, the FCA, the Department for Work and Pensions, HM Treasury, the Money and Pensions Service, the National Economic Crime Centre and the Pension Scams Industry Group. ↩