The UK’s High Court has ordered four people who ran a series of pension scams to pay back £13.7 million they conned from their victims.
According to The Pensions Regulator (TPR), the four used cold-calling and similar techniques to persuade 245 people to transfer their pension savings to 11 scam pensions operated by the ironically named Friendly Pensions Limited (FPL).
“The defendants siphoned off millions of pounds from the schemes on what they falsely claimed were fees and commissions,” said Nicola Parish, TPR’s executive director of frontline regulation. “They all took part in stripping the schemes almost bare. This left hardly anything behind from the savings their victims had set aside over decades of work to pay for their retirements.”
Between November 2012 and September 2014, the victims were cold-called or lured by a series of scam websites and persuaded to transfer their pension funds into one of 11 plans. The victims were told their pensions would be reinvested, and that they would be paid an upfront cash lump sum for making the transfer. They were also falsely told that their funds would be put into assets, bonds, and HM Revenue & Customs-compliant investments to meet the target return of 5% a year.
TPR had asked the High Court to order the defendants—David Austin, Susan Dalton, Alan Barratt, and Julian Hanson—to repay the funds they dishonestly misused or misappropriated from the pension plans. It was the first time such an order has been obtained, according to TPR.
Judge Mark Pelling ruled that Austin had been the “mastermind,” but added that all four had acted dishonestly.
Austin installed Barratt, Dalton, and Hanson as the trustees for the scam pension plans. The three were then paid to act on his instructions, allowing the funds to be used however Austin wanted. Barratt and Dalton also acted as salesmen for Austin’s Spain-based business, Select Pension Investments, persuading victims to transfer their pensions to him.
TPR said that between 10% and 25% of the funds transferred were given back to the victims as their “rebate,” although many victims were assured that this payment had come from the investment provider, not from their own pension savings. More than £1 million was paid to so-called “introducers” or “agents,” who used cold-calling to encourage pension members to transfer over their funds.
Dalriada, the independent trustee appointed by TPR to take over the running of the plans, will now be able to move forward with confiscating the four’s assets for the benefit of their victims.
“The High Court’s ruling means that Dalriada can now go after the assets and investments of those involved to try to recover at least some of the money that these corrupt people took,” said Parish. “This case sends a clear message that we will take tough action against pension scammers.”