The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) have launched a joint awareness campaign to raise understanding of pension scams and the tactics employed by potential scammers.
The ScamSmart awareness campaign, which launches today (Tuesday 14 August 2018), follows on from research conducted by the regulatory bodies in July 2018. This found that 32% of pension members aged between 45 and 65 would not know how to check whether they are speaking with a legitimate pensions adviser or provider, and a further 12% state that they would trust an offer of a free pension review from someone claiming to be a pension adviser.
The research also found that pension scammers steal, on average, £91,000 per victim.
Nicola Parish, executive director of frontline regulation at TPR, said: “£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings. If someone cold calls [pension members] about [their] pension, it’s probably an attempt to steal [their] savings. Our message is clear; hang up and report it.”
The awareness campaign will make use of TV, radio and social media to urge pension members to visit ScamSmart prior to transferring any funds. The campaign will warn against pension fraud methods, such as cold calling, unexpected contact, promises of guaranteed high returns and downplayed risks, offers of unusual or overseas investments that are not regulated by the FCA, pressurising for quick decisions and claims to unlock money from a member’s pension.
TPR and the FCA are recommending pension members reject unexpected pension offers, check who they are dealing with on the FCA Register before changing any of their pension arrangements, refuse to be rushed or pressured into a decision and consider getting impartial information and advice.
Mark Steward, executive director of enforcement and market oversight at 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 [pension members] are ever in doubt about a pension offer, visit the ScamSmart website.”
TPR and the FCA are also part of Project Bloom, a multi-agency taskforce that is working to tackle pension scams. Also included on the taskforce are the Department for Work and Pensions (DWP), HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, The Pensions Advisory Service and the National Crime Agency.
Nathan Long, senior pension analyst at Hargreaves Lansdown, said: “Rule changes that gave huge freedom to retirees have also inadvertently given fraudsters the pension equivalent of the keys to the sweet shop. Scams that target pensioners are wide ranging, potentially complex, and are often initiated by unsolicited phone calls, texts or emails. Scams tend to have one thing in common despite their variety, as they offer retirees something that is too good to be true. [Employees’] best bet is to ignore any approaches when contacted out of the blue about [their] pension. It’s safest to only deal with regulated firms allocating [members] hard earned pension savings to regulated investments.
“Short term scam awareness is helpful, but endlessly putting a plaster on the problem is not good longer term. Bettering people’s understanding of pensions will also boost their resilience to scams, which is why the government’s midlife MOT initiative has the potential to be so valuable.”