In the wake of the Panama papers leak, HMRC’s treatment of a group of 209 scammed pensioners seems ironic in the extreme. The pension savers were unwittingly involved in a £12 million pension liberation scam so serious it lost everyone involved their money and ended up in the High Court. And HMRC is blaming the scammed rather than the scammers.

209 people lost their money

KJK Investments Ltd encouraged savers to buy shares with a 6% return. Another scammer called G-Loans provided the savers loans to buy the shares. But there was actually no way that the loans could ever be repaid, since KJK lent the money to G-Loans to then lend to the investors with accrued interest. It’s no surprise that the 209 lost their money.

As if that wasn’t bad enough for the people involved, HMRC now wants those who were aged under 55 at the time of the scam to pay up 55% tax, because the switch into the dodgy scheme broke pension transfer rules.

As the Pension Minister Ros Altmann said: “Thousands of people have their lives ruined by fraudsters.

“Police, the government and regulators are ceaselessly working to shut illegal pension schemes and put these fraudsters before the courts.” Quite. So how comes it’s OK for HMRC to penalise the innocent people affected?

Ordinary people don’t understand financial jargon

The financial world is full of dodgy firms and products, as the Panama papers reveal. As ordinary folk we’re supposed to familiarise ourselves with the rules and regulations, and make sure we’re not being scammed. But the systems, financial vehicles, language used and more or less everything about the current system make it nigh on impossible to get to grips with, a jargon-fuelled nightmare very few of us can decode.

As Altmann said, “Too many people are still falling for these scams and savers need to find out how to protect their money even if a recommendation to use an adviser comes from trusted friends or family.

“Don’t be next by falling for the fraudster’s lies.” It’s easy for her to say, as (presumably) a person with significant financial industry knowledge and depth of understanding.

In reality the distinction between dodgy and OK is rarely that simple, almost never that straightforward. It’s about time the government and HMRC stopped blaming the man on the street for poor investment choices when the fault lies with the system, the chronically confusing way the financial industry explains itself and the criminals who unfairly manipulate it.

If you’ve ever studied pensions documentation you’ll know how little sense it makes, how rarely they use plain English. How come the people who are supposed to protect us don’t see it that way?