Fraudsters posing as pension advisers and providers stole an average £91,000 each from 253 known victims last year alone, new research reveals, though they are thought to be just the tip of the iceberg as only a minority of cases are reported.
Nearly a third of 45 to 55-year-olds say they would not know how to check they were dealing with a genuine person, a YouGov survey of just over 1,000 people concluded.
One in eight of the age group say they would trust someone who offered them a “free pension review” – a common tactic used by the criminals to obtain people’s details and steal the life savings they had expected to fund their lives in retirement.
The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) launch a joint advertising campaign on television, radio and social media today to alert the public to the risk.
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.
Targeted at 45 to 65-year-olds – the most vulnerable group – it advises people to be on their guard if they get an unexpected offer about their pension, and to check the FCA’s ScamSmart website before they transfer any money.
The hard-hitting ad portrays a jet-skiing criminal enjoying the holiday highlife as one of his victims miserably describes how he was duped into handing over the pension savings he had built up over nearly 40 years of work.
In the film, 57-year-old grandfather “Bob”, also played by an actor, tells how the cold caller seemed genuine, professional and “decent”.
The Daily Express has often highlighted the issue of fraudsters increasingly targeting pension savers with sophisticated scams since people were given new freedoms in 2015 to cash in their savings and spend them as they please.
Fraudsters posing as pension advisers and providers stole an average £91,000 each from 253 victims
Writing exclusively for us today Ms McVey hails the fact that more people are working and saving for retirement, thanks to now being automatically enrolled in occupational pension schemes unless they opt out.
“But where there are savings, there are scammers,” she warns.
“Don’t let a criminal enjoy your retirement.”
The campaign exposes the ruses fraudsters use to cheat people out of their life savings.
Cold calling on the telephone is the most common method of approach.
Others people should beware of include unexpected letters or emails about their pensions.
Scammers may try to entice people into parting with their cash by promising guaranteed high returns and downplaying risks, or suggesting unusual or overseas investments not regulated by the FCA, such as foreign hotels, forestry and green energy schemes.
They can put people under pressure for a quick decision by saying the offer is “time-limited” or sending a courier with paperwork to sign, and they might claim to be able to unlock cash from the victim’s pension – which is normally only possible from age 55.
Last year, 253 people told the Action Fraud report centre that they’d been scammed, losing £23million between them.
But many more people are thought to have been targeted and the watchdogs urge them to come forward.
Nicola Parish, of TPR, said: “£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings.
Cold calling is a common method fraudsters use to scam their victims
“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.”
Mark Steward, of the FCA, said: “The size of individual pension pots makes pensions savings an attractive target for fraudsters.
“That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.
“Pension scams can cause victims significant harm, both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website.”
Pensions Minister Guy Opperman added: “Pension scams are devastating for hardworking people and can rob them of the retirement they planned.”
Consumer and business psychologist Dimitrios Tsivrikos commented: “Scammers are intelligent, ambitious and deceiving. “They mimic the sales patter used by salesmen, building trust, a rapport and a relationship to infiltrate our psyches and influence our behaviour.
Pensioners should be aware of phishing emails that are not genuine
Fraudsters target the most vulnerable people
“That’s why I want everyone to remember that if it sounds too good to be true, then it probably is.
“So, put the phone down to unsolicited calls regarding your pension and stop a scammer from stealing your retirement.”
The FCA and TPR recommend four steps to protect yourself.
They are to reject any unexpected pension offers, to check the FCA Register or call the organisation on 0800 111 6768 to check the firm is authorised, to resist pressure to rush decisions, and to consider getting impartial information and advice.
People who think they have been scammed can go online to www.fca.org.uk/scamsmart for more information.
Free independent pensions advice is available to the over-50s from the Government-backed www.pensionwise.gov.uk/en.
The Treasury plans to introduce regulations this autumn to ban cold calling about pensions.
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