Some victims of pension scams have lost more than £1 million in savings each to fraudsters, new statistics have revealed.
Intelligence gathered by members of the multi-agency Project Bloom group, which was set up to tackle pension scams, has found some people who had managed to put away more than £1 million have lost their retirement funds to criminals.
New Action Fraud data reveals that two people have reported that they have lost the seven-figure sums. However, as it is believed that the majority of scam victims never contact the authorities, this total may only be a fraction of the total number of people who have handed over such large pension pots.
On average, victims of pension scams lost £91,000 each to fraudsters in 2017. They reported receiving cold-calls, offers of free pension reviews and promises that they would get high rates of return - all of which are key warning signs of scams.
A ban on pension cold calling came into force earlier this month. Firms who break the rules could face penalties of up to half a million pounds.
Research conducted by the Financial Conduct Authority highlights that a large proportion of pension holders consider themselves to be too savvy to be scammed.
Nicola Parish, The Pensions Regulator's (TPR) Executive Director of Frontline Regulation, said:
“Victims of scams are often traumatised by what has happened to them and many inevitably are left questioning how they are going to afford to retire.
“The average loss of a victim is £91,000 but these Action Fraud reports show that people can also lose much, much more.
“However large your pension pot, you must be vigilant and able to spot and avoid a scam.”
Pauline Smith, Director of Action Fraud, said:
“These statistics prove that the consequences of falling victim to a pension scam can be devastating.
“Victims can lose their life savings and are left facing retirement with little or no income.
“This is why it’s so important that you are vigilant if you receive an offer about your pension out of the blue and that you check who you are dealing with.
“If you think you have been a victim of pension fraud, please report it to us.”
The partners in Bloom will meet this week to discuss the scams problem and how the partners could work even closer together to target those responsible.
Visit ScamSmart to understand the signs of a scam if you are considering transferring your pension. If you think you have been a victim of a pension scam, report it to Action Fraud online or by calling 0300 12302040.
Notes to editors
- Project Bloom was created in 2012 and brings together government departments, agencies, regulators, law enforcement bodies and representatives of the pension industry to tackle pension scams. The partners are TPR, the Financial Conduct Authority (FCA), the Department for Work and Pensions, HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, Action Fraud, the Pensions Advisory Service, the Pensions Scams Industry Group, the Money Advice Service, the Information Commissioner’s Office, the Insolvency Service, Pension Wise, National Trading Standards and the National Crime Agency.
- The number of people seeking information about pension scams has soared since the launch of the first joint campaign by the FCA and TPR last summer. In the 55 days before the launch around 31,000 people visited the ScamSmart website at an average of 562 per day. In the 55 days after the launch this rose five-fold (462%) to more than 173,000 people - an average of 3,145 per day and the equivalent of one every 27 seconds. Additionally, over 370 pension holders were warned about an unauthorised firm after using the Warning List, an online tool that helps consumers check a list of firms operating without authorisation.
- Research conducted on behalf of the FCA in August and September 2018 suggests more than half (52%) of 45-65 year olds with a pension do not think they are likely be targeted by a pension scam. The most common reason given was that people considered they were too savvy to be scammed (21%).
- Four simple steps to protect yourself from pension scams are:
- reject unexpected pension offers whether made online, on social media or over the phone
- check who you’re dealing with before changing your pension arrangements - check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA
- don’t be rushed or pressured into making any decision about your pension
- consider getting impartial information and guidance from TPAS on 0800 011 3797