Industry experts Westerby Trustee Services warn of sophisticated pension fraud
A report released in late autumn has revealed that the average amount stolen by pension scammers was £82,000 in 2018, with many of these cases seeing all of the money stolen in just 24 hours.
25% of victims said the money was gone over the course of the day. £82,000 is also the average size of a pension pot, so the figures imply that one in four people lost their entire life savings.
The figures came from the ScamSmart campaign, commissioned by the Financial Conduct Authority and The Pensions Regulator, and asked 4017 pension holders aged 45-65. Perhaps surprisingly, the most likely people to fall for the scam, according to the report, were highly educated individuals.
Les McLintic, Chairman and founder of Westerby Trustee Services and member of The Parliamentary Review, acknowledged the issue of pension fraud as one of the most significant threats to his industry in his best practice article, where he writes ‘advances in technology are providing fraudsters with increasingly sophisticated techniques to scam pension savers’.
Highly educated victims prove the effectiveness of these scammers. McLintic explains how ‘the cloning of company names and the websites of genuine financial services businesses is also commonplace, and in recent months we have even then the emergence of fake videos which appear to show well-known personalities promoting financial products’.
Consumer advice magazine Which? sets out a list of precautions and rules to help avoid falling victim to these scams, advising wariness with anyone:
· who approaches you out of the blue over the phone, via text messages or in person at the door and wants to talk about your pension options
· who uses phrases such as ‘one-off investment opportunity’, ‘free pension review’, ‘legal loopholes’, ‘cash bonus’ and ‘government endorsement’
· who asks you to transfer money overseas
· who promises you access to your pension before you reach 55
· who doesn’t provide copies of any documentation
· who encourages you to speed up the transfer of your money into a new scheme.
It is also worth noting that pension cold calling has been illegal since the start of the year, so anyone using this method of communication is likely to be fraudulent.