Who knows what the truth is. But the scenarios are:
1] They weren't on the pilot scheme.
2] They were on the pilot scheme.
If it's 1] then you have to seriously wonder about the quality of advice they are getting. A GCSE student in PR could see how that was going to play out.
If it's 2] then you present the facts and wait for it to wash over. Don't flip flop and confirm a lot of people's prejudices.
They might not be a bunch of untrustworthy incompetents, but they seem to be going out of their way to give that impression.