Pension administrators – the front line of defence to help protect pension scheme members and Trustees against cybercrime and fraud.
PASA’s Cybercrime and Fraud Working Group are continuing to monitor the massive growth of cybercrime caused by the economic crisis resulting from COVID-19. We wrote to you previously to warn you about this and there is now some additional guidance from the National Cyber Security Centre (detailing how malicious actors are exploiting the pandemic. This can be accessed here).
A separate problem, albeit driven by the same dishonest intentions, is fraud. In any recession, research has shown fraud increases. The University of Portsmouth and Crowe has reviewed data from previous recessions and GDP shrinkage, the relationship between them is very clear. Early predictions anticipate a shrinkage in GDP from between 15% and 25%, which could in turn see an increase in fraud in the region of 60% – 100%.
This isn’t just COVID-19 related scams about PPE or fake cures, it’s about the economic effect of the recession and fraudsters praying on people’s uncertainty, fear and anxiety, especially within the older generation.
The scale of the heightened threat is severe, and organisations’ existing levels of protection may not be sufficient. It will be wise for administrators together with their cybercrime team to review and upscale protection. This consideration might include:
- Adopting TPR’s guidance when dealing with members who are considering transferring their benefits
- Reminding your teams a heightened level of diligence is required, especially when members are asking for benefit quotations or wanting to change contact or payment details
- Reviewing areas of high risk both internally and externally – this should cover processes, people and third parties
- Monitoring irregular and high value payments
Jim Gee, Chair of the PASA Cybercrime & Fraud Working Group
References
The University of Portsmouth and Crowe jointly manage the world’s largest database on the measured extent of fraud.
Office for National Statistics data on GDP shrinkage.
Predictions of GDP shrinkage in Q2 vary from 15% (Centre for Economics and Business Research) to 25% (National Institute for Economic and Social Research).