A man has been arrested on suspicion of fraud after The Pensions Regulator (TPR) and the police launched an investigation over concerns savers were lured into poorly-run pension schemes.
The probe, which was launched at the beginning of January, concerns several defined contribution (DC) schemes with over £3m of transferred funds.
These include the Alderley Wealth Management scheme, where TPR has appointed Independent Trustee Services to run the scheme after its Determinations Panel found the existing trustee, Confideo Pension Trustees, had breached its statutory, regulatory and common law investment duties.
The regulator suspects savers may have been cold-called and told they would receive higher returns and upfront cash incentives by transferring to the schemes, with some members requesting their savings were invested in low-risk UK-based investments. Instead, the money was invested in high-risk and illiquid overseas investments, the regulator alleged, with payments made to introducers.
The regulator is currently directly looking at a number of schemes, but believes its net could be widened throughout the investigation.
Search warrants were granted to inspect four homes and businesses in Newcastle-upon-Tyne - Sunderland and West Bridgford - which were conducted by the North East Regional Special Operations Unit branch of the police. The regulator separately investigated one business, issuing it with a section 72 notice to demand information.
The investigation has so far caused one man and one woman to be interviewed by police under caution on suspicion of Fraud Act offences, as well as a separate man arrested and questioned by police on suspicion of fraud. He has been released while the investigation continues.
TPR director of case management Mike Birch urged savers to report all cold-calls.
"Cold-calling pension holders isn't illegal yet, but no reputable business does it," he said. "We would urge anyone to contact Action Fraud if they are phoned and offered the chance to transfer their pension.
"Our message is simple - a cold-call about your pension is an attempt to steal your savings."
The investigation comes as the government has promised to enact a ban on pensions cold-calling "swiftly", with over three-quarters of members wanting stronger checks to avoid scams.
Confideo Pension Trustees had not responded to a request for comment at the time of publication.
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