Around two-thirds (77%) of Local Government Pension Scheme (LGPS) funds have received a claim relating to historic transfers over the past 12 months, according to Eversheds.
The poll conducted at an Eversheds webinar on 12 January revealed a marked increase in the number of complaints that LGPS funds are receiving from claims management companies (CMCs), after a poll conducted by the law firm last year found the figure was 69%.
It comes as the FCA has estimated that over £30m has been reported reportedly lost since 2017 to pension scammers, which has led to a rise in members being advised by CMCs.
Eversheds said these claims usually start with a data subject access request (DSAR), which gives individuals have the right to access and receive a copy of their personal data, and can quickly turn into a formal complaint. According to Eversheds experience from the private sector shows that once CMCs start to target a scheme, the number of claims escalates quickly.
It said finding and gathering the data for these claims can quickly ramp up the workload for LGPS funds.
Speaking on the webinar, Eversheds Sutherland legal director Charlotte Cartwright, gave some tips for funds. Firstly, she said it is worth checking that the CMC has the necessary authority from that former members to ask for their file.
"They generally do [have the authority], but I have heard of situations either where [the CMC doesn't], or where that authority is quite out of date. And it's also worth saying that that permission should specifically refer to a DSAR or something akin to it it's not enough that they've just authorised the CMC to act on this case, we're really looking for something more specific," she said.
Funds should always check exactly what information they need to provide because it is "amazing" how often more information than is strictly needed is handed over, she added.
The Information Commissioner's Office's (ICO) recent Code of Practice includes some helpful information. But unless the DSAR is manifestly unfounded or excessive "then you can't legally refuse, or charge for that", she said.
"What you can do is be ready for them. So, you can have in place a set policy for how you deal with them - perhaps also a template response letter to try and streamline things. The ICO recommends training for anyone that deals with DSARs, starting with how you spot a DSAR because sometimes it's not always completely clear that something is a DSAR. For example, it could come through social media."
She strongly recommended keeping a log of the DSARs coming through so that funds can refer to them in later complaints.
"So, for example, if you've got a complaint on a transfer from say March 2015, it's really helpful to know you have five other DSARs out there that are related to transfers round the same time, because that allows you to be consistent, and consistency is absolutely key when you're dealing with CMCs."
