Pension scams have been in the spotlight since new freedoms have provided an attractive target for fraudsters.
Scammers are becoming increasingly sophisticated, frequently targeting potential victims through emails, online banking systems, text messages and online transactions. Recently hackers stole money from 9,000 Tesco Bank current accounts, highlighting how vulnerable we all are.
Data indicates the post-freedoms pension fraud spike was worse than previously anticipated. According to The Telegraph, there were 250m scam calls last year, resulting in pension fraud totalling £19m.
DON’T BE CAUGHT OFF GUARD BY COLD CALLERS
Many pension scams start with an unsolicited phone call, text or email which usually offers a free pension review. The increase in calls from abroad is
particularly alarming. A well-publicised recent scam involves an attempt to convince people to move their pension into an unregulated overseas investment such as a hotel, vineyard or overseas building project. Never agree to invest your money overseas in unregulated projects.
In a positive attempt to clamp down on pension fraud and take meaningful action to deter scammers, the government will shortly publish a consultation document, likely to include the recommendation to ban any cold calling in relation to pension products and develop greater powers for providers to block suspicious fund transfers.
With millions of people receiving unsolicited contact concerning pensions, even the most clued-up investors can fall victim to the scammers. Fraudsters do not discriminate and use sophisticated techniques including convincing marketing materials and websites to deceive people. Data from a report conducted by Citizens Advice found that 90% of people missed the warning signs of a pension scam.
The old adage rings true – If it looks too good to be true, it probably is.
If you want advice about your pension, speak to your adviser.