Almost half (44%) of amber pension transfer scam warning flag guidance sessions are being conducted without knowledge of why the flag was raised, according to the Money and Pensions Service (MAPS).

The second most common reason for an amber flag being raised in the three months to end of June was overseas investments (36% of sessions).

Due to the very broad way in which the rules are worded, some pension schemes are raising amber flags on overseas investments covering mainstream investments, such as funds from major asset managers that are investing globally.

The number of scam guidance sessions conducted by MAPS rose 53% (month-on-month) to 1,093 sessions in May before holding steady in June.

New pension transfer rules introduced in November 2021 require the trustees of a transferring pension to raise an amber flag, which pauses a pension transfer, if they find that there are overseas investments included in the receiving scheme or other relevant issues.

Before the transfer can be authorised, the member involved must prove they have received scam guidance from the MAPS following the transfer being flagged.

Since the rules were introduced 3,731 members have received scam guidance as a result of an amber flag.

Quilter analysed data provided by MAPS under a freedom of information (FOI) request.

Jon Greer, head of retirement policy at Quilter said: “In the 12 months to 31 November 2021, the Money and Pensions Service took just 482 calls and webchats in relation to pensions scams. Comparatively, in the seven months that followed the introduction of the new pension rules, this number soared to 3,731. This highlights the real disconnect between the number of people whose pension transfers were potentially being targeted by a scam, versus the number of people who were able to identify this and reach out for help prior to the rule change.

“However, while it is positive to see such a noted increase in the number of people receiving scam guidance when it comes to their pension transfers - particularly where there is a genuine cause for concern - there remains a clear issue with transfers being halted where the trustees are finding an amber flag, but MAPS is not being made aware of the reason. The lack of information provided to MAPS in terms of the reason for the amber flag being raised is concerning. If the information is not logged, and particularly whether there was an actual risk of a scam, it will be difficult to assess where scams are focusing and may provide an inaccurate picture of the effectiveness of the regulation.

“What’s clear is that we need an improvement on the data collected to see the reasons for the member attending the scam session – no doubt this will help the session with the member, and secondly, we need to resolve the impasse that Trustees face in applying the letter of the law which is out of step with the policy intention.”

The guidance service does not appear to be making changes the data they are collecting as in the same FOI response they told Quilter they “do not enter into correspondence with members, schemes or providers about the reason for the amber flag.”