Pension fraud: Real statistics are likely to be far higher than official figures suggest, as it is many cases are not reported
Victims of pension fraud lost an average of £91,000 each from their life savings last year, figures from watchdogs reveal.
Today, they launch a new advertising campaign alerting people to this devastating crime.
Savers are being urged to stay on their guard and reject phone calls and online approaches promising ‘free pension reviews’ and guaranteed high returns.
The Government has pledged to ban cold-calling and unwanted texts and emails about pensions.
However, action has been delayed until the autumn while it carries out a last-minute consultation.
Financial watchdogs have launched a new TV, radio and social media campaign in the meantime to highlight common fraud tactics and explain what to do if you are targeted.
The adverts show the heartbreaking consequences of a pension scam for a fictional couple, and contrast this with the glamorous lifestyle being enjoyed by criminals at their expense.
Action Fraud figures reveal that 253 people reported falling victim to pension fraud last year, losing some £23million in total and £91,000 each.
But the real statistics are likely to be far higher, as it is believed many cases are not reported.
Pension freedom reforms, which allow over-55s to access their entire retirement savings pots in one go, have made this money an obvious target for unscrupulous crooks.
Fraud experts say that a combination of new rules, investors looking for returns and pensioners withdrawing large sums of cash have created a potentially fertile hunting ground for conmen.
The Government, police and financial regulators created the Project Bloom task force to combat pension fraud a few years ago.
The Financial Conduct Authority and The Pensions Regulator, both members of the task force, have now teamed up to create the new ad campaign under the ‘ScamSmart’ banner.
It is aimed at savers aged 45-65, whom they believe are most at risk from pension sharks.
A survey of around 1,000 people commissioned by the regulators found 32 per cent of pension holders in this age group would not know how to check whether they are speaking with a legitimate pensions adviser or provider.
And 12 per cent of them would trust an offer of a ‘free pension review’ from someone claiming to be a pension adviser.
Watchdogs say the telltale fraud tactics to watch for are:
Phrases pension fraudsters use that should set alarm bells ringing
The offer won’t last long
You’re entitled to a free government review
You’ll make a better return by investing in storage units/forests/overseas property
There’s a guaranteed 7 per cent return
We’ll send a courier over with your documents
Can you sign quickly – I’m parked on a double yellow line
There’s a legal loophole
You’re a sophisticated investor
Your pension company might try to talk you out of it – they just want to keep your money
– Unexpected contact about your pension by phone, post or email
– An offer of a ‘free pension review’
– Promises of guaranteed high returns while any risks are downplayed
– Touting of unusual or overseas investments that aren’t regulated by the FCA, such as overseas hotels, forestry and green energy schemes
– Pressure to make a quick decision, for example with time limited offers, and sending a courier round with paperwork to sign
– Claims to be able to unlock money from an individual’s pension early, before the age of 55 – something known as pension liberation fraud, which can lead people to lose a pension pot and then face a 55 per cent tax charge on the vanished cash.
The steps watchdogs advise taking if you are contacted by fraudsters are:
– Reject unexpected pension offers
– Check who you’re dealing with before changing your pension arrangements, by using the FCA Register of authorised firms or calling the FCA on 0800 111 6768
– Don’t be rushed or pressured into making any decision about your pension
– Consider getting impartial information and advice – contact Pension Wise for free help
People reporting fraud or cyber crime to Action Fraud have to wait on the telephone 11 minutes on average, according to Freedom of Information figures obtained by the Sunday Times.
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