Action Fraud is warning those with pensions to keep them safe and remain vigilant to keep their pension pots out of the hands of scammers. New figures released from the National Reporting Centre for Fraud and Cyber Crime have revealed that £1.8 million has already been lost to fraudsters this year so far.
Last month officials urged victims and pension providers to report when a fraud took place as numbers suggested a decrease of 80% from 2014 to 2020. Since then, Action Fraud report that these numbers have gone up and they have seen an increase of almost 45%, suggesting that the advice has been acted on although the true number of victims losing money due to pension scams is still unknown. The numbers are worrying though and, in another bid, to make people aware of scams Action Fraud have launched a new initiative and a national awareness campaign to remind people to do their research before making any adjustments, changes or investing their pensions.
Pauline Smith, head of Action Fraud, said: “Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack any kind of empathy for their victims, who can often lose their whole life savings to these scams. We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to a fraud and it is nothing to feel ashamed or embarrassed about. It is incredibly important that instances of pension fraud, and attempted scams, are reported to Action Fraud. Every report helps police get that bit closer to the people committing these awful crimes. Reporting to Action Fraud also allows our specialist victim-support advocates to provide people with important protection advice and signpost them to local support services.”
Anyone can be a victim of a pension scam and criminals are highly sophisticated in executing them, so it is important to learn how they work and spot the signs. A scammer will appear legitimate and try to persuade savers to transfer their entire savings, or release funds from it by making promises and offering attractive deals. Pension money can also be invested in high-risk schemes like renewable energy, hotel development, overseas properties and more. This money is quickly lost and as the saver has willingly transferred it, it can be incredibly difficult to get back once a scam has taken place.
Warning signs of a pension scam and advice from The Pensions Regulator:
Cold calling about pensions is illegal and a likely sign of a scam. Cold calls used to be scammers’ most common method of approach. But since the cold-call ban was introduced in 2019 their tactics have evolved. Some have moved to sophisticated online models, making contact through social media, or will use friends and family to reach clusters of people. Others will rely on established practices like offering a free pensions review.
It’s vital that you keep up to date with current and evolving scam tactics and get to know the signs of a scam.
Other common signs of pension scams:
Phrases like ‘free pension review’, ‘pension liberation’, ‘loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
Guarantees they can get better returns on pension savings.
Help to release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise.
High pressure sales tactics – time limited offers to get the best deal; using couriers to send documents, who wait until they are signed.
Unusual high-risk investments, which tend to be overseas, unregulated, with no consumer protections.
Complicated investment structures
Long-term pension investments – which often mean people who transfer in do not realise something is wrong for several years.
Visit the Scam Smart website – https://www.fca.org.uk/scamsmart – to learn how to protect yourself from pensions scams.