It’s good to see the government taking the issue of pension scamming seriously.
ScamSmart is a new advertising and information campaign from the Financial Conduct Authority (FCA) and The Pensions Regulator (tPR). As the name suggests the campaign aims to help people become more aware of scamming techniques and encourages people to report any they are aware of.
A poll commissioned for the campaign says that 32% of pension holders aged 45 – 65 have no idea how to check for scams or whether or not they are dealing with legitimate advisors or providers.
Those people who have been the victim of a scam lost an average of £91,000 each.
However, of equal concern is that only a minority of scams are reported, largely because victims feel embarrassed or humiliated by having been caught out. The Pension Liberation Industry Group suggest that pension losses could be more than £1bn over the last two years.
The most common tactics used by fraudsters are unsolicited requests offering a free pension review. Consumers are also told to look out for offers promoting fabulous investment opportunities and urging consumers to withdraw money from their pension pot.
Scamming pension pots has become big business since April 2015 when the over 55s were given greater freedom and access to their retirement cash. A prime example of this are the reports of ‘sharks’ and ‘vultures’ preying on British Steel pension scheme members.
Key advice from the campaign is to reject unsolicited offers and to check the FCA Register to see if the company is authorised by them. A professional advisor will never rush or pressure anyone into making a decision about a pension.
In response to the issue, the government is expected to introduce regulations later this year that ban all unsolicited direct marketing relating to pensions. In our view, it can’t come soon enough.