A recent survey by Citizens Advice Bureau suggests that nearly 90% of people would be unable to spot a fraudulent pension advice offer.
The survey showed two fraudulent pension advice advertisements and a genuine one to more than 2,000 people. 88% selected one of the two fraudulent ads as the one they’d be most likely to pick for advice. The ads that performed best were those that offered free advice and high returns on investments, rather than the more sober propositions in the genuine ad. There was also little difference in the choices of those who said they were confident in their ability to spot a scam from those who weren’t.
The 2015 pension freedom reforms have led to an even greater degree of pension fraud, as the relaxing of pension rules makes conmen’s claims seem more plausible. According to Citizens Advice, the six months after April 2015, when the reforms were introduced, saw 33% of 55-64-year-olds receiving unsolicited calls about their pension. They also reported that targeted scams in the form of emails or phone calls are most dangerous and have affected 10.9m people in the last year.
How to spot a pension scam
Look out for high-pressure tactics encouraging you to make a quick decision. Anything described as completely free should also set alarm bells ringing; genuine companies don’t spend money promoting free services to individual customers. Free reviews or pension advice are generally intended to secure information about your account that could be used to steal your savings.
What to do
If you suspect you’re being targeted by conmen, visit the government website www.pension-scams.co.uk. You could also look up the company name on the Financial Conduct Authority online register to make sure it’s genuine, but be aware that fraudsters routinely use names very similar to those of legitimate firms. The FCA also offers a ScamSmart service, where you can check the offer you’ve received against known frauds.