Research shows that more than 1 in 5 people in the at-risk age range consider themselves too savvy to be scammed.
Intelligence gathered by members of the multi-agency Project Bloom group, which was set up to tackle pension scams, has found some people who had managed to put away more than £1 million have lost their retirement funds to criminals.
New Action Fraud data reveals that two people have reported that they have lost the seven-figure sums. However, as it is believed that the majority of scam victims never contact the authorities, this total may only be a fraction of the total number of people who have handed over such large pension pots.
On average, victims of pension scams lost £91,000 each to fraudsters in 2017. They reported receiving cold-calls, offers of free pension reviews and promises that they would get high rates of return – all of which are key warning signs of scams.
Research conducted by the Financial Conduct Authority (August/September 2018) suggests more than half (52%) of 45-65 year olds with a pension do not think they are likely be targeted by a pension scam. The most common reason given was that people considered they were too savvy to be scammed (21%).
Nicola Parish, The Pensions Regulator’s (TPR) Executive Director of Frontline Regulation, said:
“Victims of scams are often traumatised by what has happened to them and many inevitably are left questioning how they are going to afford to retire. The average loss of a victim is £91,000 but these Action Fraud reports show that people can also lose much, much more. However large your pension pot, you must be vigilant and able to spot and avoid a scam.”
Four simple steps to protect yourself from pension scams are:
- 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 guidance from TPAS on 0800 011 3797
A ban on pension cold calling came into force earlier this month. Firms who break the rules could face penalties of up to half a million pounds.
Visit ScamSmart to understand the signs of a scam if you are considering transferring your pension. If you think you have been a victim of a pension scam, report it to Action Fraud online or by calling 0300 12302040.
Source: The Chartered Institute for Payroll Professionals (CIPP)