Pension scams: typical victim losing £91,000 fraud body warns

The terrifying cost of pension scams has been laid bare in new data showing the average scammer loses £91,000.

Two victims have lost more than £1 million to pension scams in recent years, according to new figures.

Action Fraud highlighted the devastating impact scams can have on finances, with the typical victim losing £91,000.

This ties in with earlier research from the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), which showed that Brits aged between 45 and 65 are regularly targeted by scammers because they tend to have more money to put into investments.

According to the regulators, one in three don't know how to check whether they're speaking to a legitimate pensions advisor or a scammer.

Fraud activity has increased since pension freedoms gave over-55s the ability to access huge amounts of money with relatively limited oversight.

Signs of a scammer

If you get an unexpected phone call, be on your guard, advises Nicola Parish, executive director of The Pensions Regulator: “if someone cold calls you about your pension, it’s probably an attempt to steal your savings.

"Our message is clear – hang up and report it.”

Other scammer tactics identified by regulators include:

  • Unexpected contact about your pension via phone, post or email;
  • A 'free pension review';
  • 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).

How to find your lost pension pots

What should I do if I'm suspicious?

The FCA and TPR recommend you always reject unexpected pension offers.

You can check if you're dealing with an authorised firm using the online FCA register or calling the FCA on 0800 111 6768.

Also have a look at the FCA's ScamSmart website, where you can find extra advice and report scammers.

Read more: common phone scams and how to stay safe

Cold calling ban: when can a company contact me?

In a bid to better protect the public, the Government recently introduced a ban on pension cold calling. The move also includes texts and emails.

So does that mean any, call is a scam? Almost certainly... unless it falls under one of the two following exceptions: companies can still contact customers who have expressly requested information from them, as well as making marketing calls to existing customers. 

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More must-read pension stories:

Need pension mis-selling scandal: are you due £2,000?

100,000 workers left behind by pension revolution

8 costly investing mistakes to avoid

When buying the whole shop can MAKE you money

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