The paper warns that pension scams have become more prevalent in the post-pension freedoms era, adding that that some scams have moved online and that the scale of pension fraud is still unknown, with many cases going unreported.
“Being alert to the risk of pension scams is absolutely critical. The government’s decision to outlaw pension cold-calling sent a clear message to pension savers: if you receive a call out of the blue about your pension, hang up.
“But it has resulted in scammers moving online to target vulnerable people through internet searches, social media and email. Although the authorities take steps to intervene where a scam is identified, they are engaged in a perpetual game of whack-a-mole. When they deter cold-call scam tactics, the same fraudsters pop-up online. This is a particular worry for younger savers, who may have been less susceptible to telephone-based scams, but are used to transacting online and may be lured into scams on the web or social media.
“The most important thing for people to do is not to rely on intervention from the authorities alone, but instead to take preventative measures themselves. This means exercising caution about any ads and sales pitches that seem too good to be true, for example those offering consistent double-digit returns. Be sure that before you engage anyone to advise you on your pension you have checked that they are registered with the Financial Conduct Authority to provide pensions advice.
“Uncertainty caused during the Covid-19 pandemic also increases the risk of financial fraud, so it is particularly critical to be alert at the moment. Be very cautious about offers to switch your pension to ‘safer’ investments or unsolicited contact claiming to be a government email or text. Check everything thoroughly before acting and look for the warning signs of a possible scam.
“The Pension Schemes Bill currently making its way through Parliament makes some provision for blocking transfers where there is risk they may be fraudulent. At present, although pension providers can warn people against transferring to a suspect operation, the customer has a statutory right to transfer and can insist on switching. Once the Bill passes, it will add an extra layer of protection.”