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Over £9m stolen in pension liberation scams since April

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Fraudsters have taken more than £9m from savers in the five months since April, twice the sum taken in the same period last year.

Figures from the City of London police show that £9.1m worth of scams have been reported between April and August 2015, up from £4.5m.

The figures also show that the sums involved in scams are increasing, with the monthly average loss post-freedom reaching £1.8m.

By contrast, the average monthly loss for the 12 months to August was £1.3m, while the two year average sits at £1.1m.

However, while the total losses are increasing, the number of cases being reported has also dropped, and last month reached its lowest level for two years.

In August, the City of London police recorded just 50 cases of pension liberation frauds, while July saw just 74 cases.

Aviva head of financial research John Lawson says the rising sums reflect the ability of savers to easily access 100 per cent of their pension since April, with larger pots up for grabs.

However, he argues the fall in numbers being reported is masked by the increasing practice of scammers using investment scams to steal funds.

“These scammers are still probably calling in even great numbers, but I think what you will see coming through longer terms is that people might take two or three years to notice they’ve been ripped off.

“People are falling for it in larger numbers and investing in hotels and car-parks and holiday home developments that don’t exist and they just don’t know it yet.”

Informed Choice planner Martin Bamford adds the statistics would also understate the scale of the issue by failing to include instances which did not make it to the police.

“The problem with reported crime statistics is that they can always hide the reality of what is happening below the surface.

“There’s also a chance that we might be seeing the fraudsters targeting smaller numbers of larger pots, because the more people you expose your scam to, the more likely you are to get caught.”

Labour’s shadow pensions minister Nick-Thomas Symonds says: “With average losses from fraud on the up, it’s clear the government isn’t doing enough to protect savers.

“There needs to be a far more co-ordinated approach across the relevant agencies to clamp down on fraud and more power needs to be put in the hands of consumers.

Citizens Advice warned in August that scammers were increasingly luring savers into investments.

A survey of 460 local Citizens Advice managers, volunteers, staff and Pension Wise guiders found that half of staff said scammers were increasingly targeting cash lump sums with dubious investment offers.

Some 40 per cent had spoken to individuals repeatedly targeted by scammers.

How pension fraud has surged since April 2015

Month Reported Sum of Total Loss
Sep-13 124 £1,587,916.37
Oct-13 133 £1,643,800.14
Nov-13 88 £620,787.70
Dec-13 93 £371,594.73
Jan-14 59 £449,236.87
Feb-14 120 £383,685.66
Mar-14 55 £566,224.24
Apr-14 205 £1,398,586.89
May-14 57 £812,952.04
Jun-14 132 £588,350.70
Jul-14 189 £1,131,950.78
Aug-14 296 £542,406.39
Sep-14 179 £966,766.48
Oct-14 160 £1,569,281.11
Nov-14 89 £566,653.45
Dec-14 95 £239,174.07
Jan-15 186 £1,471,035.25
Feb-15 240 £631,202.44
Mar-15 82 £931,800.08
Apr-15 78 £1,452,336.35
May-15 78 £4,719,523.54
Jun-15 85 £488,319.91
Jul-15 74 £1,256,236.75
Aug-15 50 £1,171,968.00
GRAND TOTAL 2,947 £25,561,789.94
TWO-YEAR AVERAGE 122.79 £1,065,074.58
ONE-YEAR AVERAGE 116.33 £1,288,691.45
POST-FREEDOM AVERAGE 73.00 £1,817,676.91

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. George Osborne’s plan is certainly a success for some people then! Knock yourself out George. No, really……Knock yourself out!

  2. Unfortunately, due to a typo in the launch press release, the word ‘scammers’ was dropped from the announcement of “The new pension scammers’ freedoms”.

    The other piece of analysis I’d like to see is how many of those mugged by scammers also have been mugged by HMRC taxing them for the privilege?

  3. Well, who saw that coming?….Oh, that’s right – just about everyone in the pensions industry.

    Meanwhile, money continues to be poured into FSCS advertising (which doesn’t need promoting) and next to nothing spent on warning public about a genuine threat (which does). Genius.

  4. Except that these are not losses that have been secured by scammers since pensions freedoms came along in April are they?
    These figures are all about scams that have been committed long before April 6th 2015 – as the whole process takes some time to work through and for clients to understand and accept that the “guaranteed high return, no risk, cannot fail” investment is actually a scam, and then face up to the fact they’ve been duped, lost money, and should report it to the authorities.
    Another example of not letting the facts get in the way of the headline the reporter wants to write!!!

  5. I presume that these scams are perpetuated by unregulated firms and that the regulated firms will have to pay for the claims generated by them. Whatever happened to Caveat Emptor, oh of course we have the FOS now so people can take whatever risk there is, if it makes money good but if it loses money then get your money back.

  6. It does make your heart sink, does it not ?

    And to think; these are the cases we know about, what about the poor souls who don’t know they have fallen prey to such schemes ?

    • I agree, real people are being hurt by this. No matter how many times they hear ‘do not invest your life savings with people you don’t know’ they continue to use these rogue firms. How do you stop people making such investments that turn out to be a scam? Do you force them to see a regulated adviser? No, that’s not possible, its doing away with freedom. Okay, that was wishful thinking on my part but hang on who is going to pay for this in the long run. Oh, you mean me and you? Great eh?

  7. And they want to slacken off regulation! Are they mad?

  8. And how much have scammers made away with in the following areas, I wonder? Building trade, Emergency Plumbing repairs, exorbitant Motor repairs, diesel-engined VW’s, ticket-touts, that person’s uncle from Nigeria who never did send you 10% of his $25million inheritance….etc, etc. It’s not just in pensions. Fraud is, unfortunately, a fact of life in the world we live in.

    Headline should instead read: Fools get easily parted from their money.

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