At the start of Citizens Advice’s ‘Scams Awareness Month’, Kate Smith, head of pensions at Aegon, highlights the need for consumers to be on their guard to spot and prevent scams:
“Not only are they master manipulators, scammers are constantly evolving ways to trick victims. The sad fact is that in today’s world, people’s savings are under threat from potential fraudsters. However, while incredibly serious, this isn’t something that should keep people awake at night. Following some simple steps can ensure that people protect themselves.
“Scammers are becoming increasingly sophisticated in the ways they target people’s money, including pension savings. Being aware of what to look out for can not only protect your money, but save you a lot of stress as well. While initially tempting, companies promising high returns from unusual unregulated investments, or offering early access to pension savings, more often than not, turn out to be scams. It can be all too easy to be taken in by scammers, but being on your guard is your first, and best, line of defence.
“It’s not only individuals who need to guard against the threat of scammers though, we stand a much stronger chance of beating them by being collectively vigilant. No controls are infallible, so pension providers and schemes, along with advisers, need to be alert and update controls as scams evolve.
“Thwarting scammers at every opportunity is key and strengthening regulation can certainly dent scammers’ success rates. The promise of high returns by persuading individuals to move pensions overseas, when the individual has no intention of living abroad, was previously one of the scammers’ favourite tactics. Today, it has almost disappeared off the radar, thanks to government regulation. The introduction of an immediate 25% tax charge proved a simple and effective way to clamp down on this type of fraudulent activity, resulting in an almost immediate decline in this type of scam.
“In a similar vein, we were relying on a new Pension Bill to address issues highlighted by the pension industry to give savers greater protection. Unfortunately, the Queen’s Speech was disturbingly quiet on any legislation to ban pension cold-calling or give schemes and providers greater powers to block suspicious transfers.
“Pension scams won’t just go away without some serious action. Limiting the right to a statutory transfer could potentially safeguard millions of pounds from scammers. The government must keep this on its agenda, speak up and take the issue seriously.
Following some simple steps can ensure that people protect themselves from pension fraudsters:
Top Tips to avoid scammers
1. Try not to engage in conversation with Cold Callers. The safest thing to do is to hang up.
2. Think about installing call blocker technology on your phone.
3. Never give out personal information, including your bank details.
4. Always check the Financial Conduct Authority (FCA) online register if you doubt a company.
5. Check the FCA ScamSmart warning list for known investment scams.
6. Use the Pension Advisory Online tool to Identify a pension scam if you are worried about information given or action you’ve taken https://www.pensionsadvisoryservice.org.uk/my-pension/online-tools?moreInfo=4
7. Never feel pressurised into making a quick decision, and read any documents carefully before you sign on the dotted line.
8. Always do the research. As always, if in doubt, use a regulated adviser. You can find one of these using the ‘unbiased adviser’ website.
9. Report any concerns to your pension provider, adviser, or Action Fraud by calling 0300 123 2040 or online at actionfraud.police.uk.