Finance firms turn back on deceased pension fraud

old-age 2There are increasing fears that the Government and the pension sector have their heads firmly buried in the sand over the threat of deceased pension fraud, after a survey which probed the top 30 pension providers about the issue drew a complete blank.
All of the firms approached with the anonymised benchmarking survey – which included questions about levels of fraud, strategies in place to combat it and action taken – refused to answer any questions. Meanwhile the Department for Work & Pensions declined a Freedom of Information Act request on the grounds that it was economically unviable to respond.
Deceased pension fraud, which commonly occurs when a relative continues to collect the pension of a person that has passed away, is a major issue.
A report out earlier this month by The National Fraud Initiative, which is carried out biannually by Audit Scotland, revealed that matching Disabled Blue Badge and pensions data against records of deceased individuals in Scotland could save £2.4m and £4.6m, respectively.
This is thought to be a conservative estimate at best, as an audit of the process showed that 24% of the council bodies did not record their outcomes fully on the NFI web application and that many could improve the way they record their investigations.
Furthermore, the most recent Pensions Fraud Risk survey by Baker Tilly found that 51% of more than 70 pension schemes had not tested their internal fraud controls for more than a year which is in breach of regulatory guidance that calls for internal controls to be reviewed “at least on an annual basis”.
Studies by leading accountancy practices including PWC and Deloitte show that levels of all types of fraud increase during times of economic stress. With the UK economy undergoing a period of instability as a result of the Brexit vote, deceased pension fraud, a relatively easy crime to commit, is expected to rise.
Wilmington Millennium director Karen Pritchard said: “It is incredibly disappointing that not a single organisation responded positively to our survey. Despite not having the hard evidence, anecdotally we are being told that deceased pension fraud is a growing concern and no wonder as it is costing the tax payer millions.
“However, simple solutions such as screening against deceased fraud products can quickly and easily identify the fraudulent payments and cut them off at the source. This is an economic crime and one that will only get worse if the economy remains unstable.”

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