Pension scams are becoming increasingly sophisticated and victims of fraudsters are now losing an average of £91,000 each. Some people even lose all their life savings.
The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are urging the public to be vigilant when receiving unsolicited offers about their pensions.
The two watchdogs have launched a joint TV advertising campaign to raise awareness of pension scams and the most common tactics used by fraudsters.
This comes after figures show that a total of 253 victims reported to Action Fraud that they had lost more than £23 million to pension scammers in 2017, which equates to an average loss of £91,000 per victim.
Highly sophisticated scammers lure people into transferring their pensions into fraudulent schemes. Victims of pension scams can lose their life savings and be left facing retirement with limited income.
One of the most common tactics is to offer a ‘free pension review’.
Cold calling is currently by far the most common method used to initiate pension fraud. Other scam tactics include:
- Unexpected contact about your pension via phone, post or email.
- Promises of guaranteed high returns and downplaying the risks.
- Offering unusual or overseas investments that aren’t regulated by the FCA e.g. overseas hotels, forestry, green energy schemes.
- Putting people under pressure to make a quick decision, for example with time-limited offers, and sending a courier round with paperwork to sign.
- Claiming to be able to unlock money from an individual’s pension (which is normally only possible from age 55).
- The FCA and TPR are urging the public to be ScamSmart with their pension and always check who they’re dealing with.
The regulators recommend four simple steps to protect yourself from pension scams:
- Reject unexpected pension offers whether made online, on social media or over the phone.
- Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA.
- Don’t be rushed or pressured into making any decision about your pension.
- Consider getting impartial information and advice.
- If you think you’ve been a victim of a pension scam, report it. Visit ScamSmart to find out more.
The joint advertising campaign shows the contrast between the impact on the victims of pension scams and the lifestyles enjoyed at their expense by the criminals. Using TV, radio and social media adverts, it urges anyone who is contacted about their pension to visit ScamSmart before they transfer any funds, so that they don’t end up becoming the victim of a scammer.
FCA and TPR are part of Project Bloom a multi-agency taskforce which is working to combat pension scams. The taskforce includes the DWP, HM Treasury, the Serious Fraud Office, City of London Police (Action Fraud), the National Fraud Intelligence Bureau, The Pensions Advisory Service, and the National Crime Agency.