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Pension scam enquiries up 462%

Visits to the FCA’s Scam Smart website have increased 462 per cent in less than two months following its joint scam awareness campaign with The Pensions Regulator.

The Scam Smart site – which allows people to compare pension fund options and find information on potential scams – previously had an average 562 page views daily.

This rose to an average of 3,145 a day in the 55 days immediately following the summer campaign, the regulators have said.

The regulators’ campaign is calling for people to check pension providers on the FCA Register before agreeing to offers.

People are also being asked to consider getting impartial information and advice before making decisions.

Pensions minister Guy Opperman says: “I would urge savers to always exercise caution and seek independent guidance or advice before making important financial decisions – free, impartial guidance is available from Pension Wise or The Pensions Advisory Service.

“Pension scams are devastating for people and can rob them of the retirement they planned. Raising awareness of how these heartless criminals operate is key to tackling fraud, and the response to this campaign is encouraging.”

The number of visitors to the Scam Smart site also rose from 31,000 in the 55 days prior to the campaign to 173,000 in the same period of time afterward.

The campaign’s success follows the Autumn Budget decision to ban pensions cold calling from early next year.

More than 10m adults in the UK are currently receiving an unsolicited pension offer each year, FCA figures show.

More than half of 45-65-year olds with a pension do not think they are at risk of being targeted, however.

FCA executive director of enforcement and market oversight, Mark Steward says: “Many pension holders believe they are too savvy to be scammed, but pension scams are often very sophisticated and difficult to spot. Scammers will target people from all walks of life and with any size pension.”

A survey commissioned by the regulators in August reveal victims of pension fraud last year lost an average of £91,000 each.

The research also showed 32 per cent of 45-65-year olds are unsure how to check if they are speaking to a legitimate pensions provider or adviser.

TPR executive director of frontline regulation Nicola Parish says the campaign is set to continue in full force next year until cases decrease.

She says: “The dramatic increase in the number of people visiting ScamSsmart for information is encouraging but this is not the end of our campaign. It is vital we continue spreading the word about scammers and how they operate.”

Quilter head of retirement policy Jon Greer says pensions freedoms have inadvertently increased scam risks.

He says: “While people have easier access to their funds, they are also in turn more vulnerable. Scammers now simply have to convince an over 55-year old saver to withdraw their funds and divert this money into other forms investment with the promise of amazing returns.

“[This] never becomes a reality. A pension is something people have worked all their lives to build up but one lapse of judgement could mean that it all vanishes.”

The newly-launched Single Financial Guidance Body will also play a major role in building awareness as the campaign moves into 2019.

Just Group director of retirement Stephen Lowe says: “The SFGB could become the place where most people naturally go to to check their plans and receive the protection to avoid those too good to be true offers.

“We are finally on a clear path to a single, impartial pension guidance service [and] it really needs to become to social norm for it to deliver a comprehensive defense against scams and poor choices.”



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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Is this all down to pension’freedoms’?

    Freedom for scammers to run riot.
    Freedom for HMRC to rake it in
    Freedom for advisers to continue to make money from retirees
    Platforms – as above
    Fund Managers – as above.

    The poor old client has the freedom to get poorer and not much else.

  2. Harry, what is causing the problems are not good regulated advisers (I must assume you have had a bad experience), its not pension freedoms, fund managers its fraudsters and UNREGULATED investments.

    As for advisers and fund managers making money from retirees, well yes, they need to be paid, the client has a choice and can see if they are getting valued for money.

    The vast majority of consumers that see their hard earned pension funds stolen, DON’T use a regulated adviser, they use a SIPP, via a con artist and then try to blame everyone else. If they had used and paid for a regulated adviser, they most likely (in 99% of cases)would not have lost the funds in the first place and if they did, where advised badly, even into a unregulated fund would have been protected by the FOS and FSCS.

    You cannot blame advisers for consumers stupidity, advisers make up 2% of complaints, so clearly despite what you may think, the vast majority are doing a good job for their clients.

    The other problem is most consumers select or look for the cheapest adviser they can find. It is impossible to get anything cheap that is of any qualit , buy cheap pay twice.

    Why does everyone seek to blame anyone and everyone, with advisers always the easy target, when the truth is a little digging and some common sense, nine times out of ten would prevent these fraudsters having any chance of success. As most of these consumers are old enough to know sayings such as “if it’s to good to be true”, “Buy cheap, pay twice”, “A fool and their money are easily parted”, you do have to wonder.

    • Martin

      I think you may have misconstrued.

      For those with no other assets is Drawdown a good idea? Should they risk solvency in retirement on the vagaries of the stock market?

      If people have significant other assets (ISAs, Share Portfolios & insurance bonds for example) do they really need more market exposure to their pension funds?

      I get the impression that at retirement Drawdown seems to be the default solution. I doubt where drawdown income is that much better than current (or even past) annuity rates if sustainability is required. The popularity is encouraged by the prospect of accessing cash. I wonder if this doesn’t just point to poor advice leading up to retirement (pensions are not a sole solution) and I’m afraid I do suspect that advisers are happy to charge say 1% or 2% in perpetuity (or even more) rather than a one off payday with an annuity. All the time encouraged by fund managers, providers and platforms, with HMRC not unhappy either.

      Annuities are perhaps the only financial product with a guarantee. Joint life option takes the worry away from a partner or spouse should the pension holder pre-decease. There are also enhancements for impaired lives.

      I’m not saying that drawdown is wrong in all cases, I just doubt if it really suitable for the majority. With current markets declining how many will welcome a reduction in their income if they are to preserve capital for future years?

      • Totally agree with some of your points, for the right clients annuities are best, but this article is about fraud, which is a totally different kettle of fish.

        • Martin

          Agreed. We need to put clear blue water between the question of suitability and downright fraud. Whilst ex and current advisers conflate the two we will struggle to engender consumer trust

          • Of course some of us conflate the two. Dragooning people into unsuitable Drawdown is fraud.

            Oxford Dictionary:

            Fraud: Wrongful (or criminal) deception intended to result in financial or personal gain.

            Are you trying to tell me there is a difference? If it’s downright unsuitable (which I’ll bet many are) then it’s fraud.

  3. “The regulators’ campaign is calling for people to check pension providers on the FCA Register before agreeing to offers.”

    Be warned, even checking the FCA register is not sufficient.

    I am assisting a victim of pension fraud who was contacted by someone who claimed to be from the private banking division of his own bank and could offer better than average interest. The website was perfect. The documentation was perfect. The FCA registration number was correct.

    The only thing that was wrong was the sort code and account number to which he transferred £103,000. This was the fraudster’s account!

    Until we get full implementation of Confirmation of Payee in mid-2019 (something that the banks should have delivered years ago when faster payments came in) we need to be even more cautious of transferring money to ‘investment funds’ that we have never dealt with before.

    • I agree. This was something that should and could have been sorted out in the 1980’s rather than more than 30 years after it was forseen as a potential (and increasing) problem.
      Regulatory failure on a grand scale.

  4. Raise interest rates

    • Absolutely. Will sort a myriad of problems. Better income for those with savings. Better annuity rates so that draw down becomes a marginal choice – as it was before. Gratuitous spending reigned in. A further break on house prices. Somewhat cheaper imports and more reasonably priced holidays. Finally a salutary lesson for those who have taken on too much debt.

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