Are you too savvy to be scammed?
06 February 2019
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.