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£1.8m already lost to pension scams this year, says Action Fraud

Vicky Shaw, PA Personal Finance Correspondent
·4-min read

Some £1.8 million has already been lost to pension fraud this year, according to the UK’s scams reporting centre.

Action Fraud, which released the total, is warning savers to be vigilant.

It said there has been an increase in reports of such scams so far this year, with 107 reports of pension fraud received in the first three months of 2021.

This was an increase of nearly 45% when compared with the same period in 2020.

Action Fraud said there had previously been a steady fall in pension scam reports from 1,788 in 2014 to 358 in 2020 – a reduction of nearly 80%.

It has launched a national awareness campaign to remind people to do their research before making changes to their pension arrangements.

Pauline Smith, head of Action Fraud, said: “Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack any kind of empathy for their victims, who can often lose their whole life savings to these scams.

“We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to a fraud and it’s nothing to feel ashamed or embarrassed about.

“It’s incredibly important that instances of pension fraud, and attempted scams, are reported to Action Fraud. Every report helps police get that bit closer to the people committing these awful crimes.

“Reporting to Action Fraud also allows our specialist victim-support advocates to provide people with important protection advice and signpost them to local support services.”

Pension scams often include free pension reviews, too-good-to-be-true investment opportunities, or offers to help release money from someone’s pension even though they are under 55 – the age at which people can use the pension freedoms.

The true scale of pension fraud is likely to be much higher than what is being reported, as victims often do not realise they have been scammed until many years later, Action Fraud said.

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Nicola Parish, the Pensions Regulator’s executive director of frontline regulation, said: “Pension scams are devastating, with victims potentially losing life-changing sums.

“Savers must be cautious about making decisions about money that may have taken a lifetime to build, as it can be snatched away in an instant.”

Mark Steward, director of enforcement and market oversight at the Financial Conduct Authority (FCA), said: “Scammers target people from all walks of life, it doesn’t matter the size of your pension pot. Scammers destroy retirement dreams, so it’s vital that consumers know how to protect themselves from scammers.

“The best way to protect yourself is to know who you’re dealing with. Always check the FCA register to make sure that anyone offering you pension advice or any other financial service is authorised by the FCA to perform the service they are providing for you, and that the details they are providing are the same as those on the register.

“Unexpected and unsolicited offers, free pension reviews, promises of high returns which sound too good to be true, and pressure to make a decision quickly are all warning signs of scam. Use the tools on our ScamSmart website to protect yourself and your retirement.”

– Here are some simple steps from Action Fraud to protect yourself from pension scams:

1. Reject unexpected pension opportunities, such as free pension reviews or investment opportunities involving your pension, whether made via email, social media, text, or over the phone.

2. Research who you are dealing with before changing your pension arrangements – check the FCA register, or call the FCA on 0800 111 6768 to see if the firm is authorised.

3. Do not be rushed or pressured into making any decision about your pension. Consider getting impartial information and advice from a financial adviser authorised by the FCA to help you make the best decision for your own personal circumstances.

4. Be suspicious if you are contacted out of the blue about an investment opportunity. Seek advice from trusted friends, family members or an independent professional advice service before making a significant financial decision. Even genuine investment schemes can be high risk.

5. Visit the ScamSmart website – https://www.fca.org.uk/scamsmart– to learn how to protect yourself from pensions scams.

6. If you think you have been a victim of pension fraud, contact your pension provider immediately and report it to Action Fraud online at actionfraud.police.uk or by calling 0300 123 2040. You can also report an unauthorised firm or a scam to the FCA by using their reporting form or by calling 0800 111 6768.

7. Cold calls about pensions are illegal. You can report nuisance calls and messages to the Information Commissioner’s Office online or by calling 0303 123 1113.

8. If you have agreed to transfer your pension and now suspect a scam, contact your provider immediately. They may be able to stop a transfer. If you are unsure what to do, contact the Pensions Advisory Service for help.