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Two-thirds of Brits wouldn’t report a pension scam

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Written by: Paloma Kubiak
04/04/2017
Pension scams are a major threat to savers’ retirement pots, but half of Brits don’t know how to report one and almost two-thirds wouldn't flag a suspected con to authorities.

Consumers were asked if they would report being cold contacted about their pension, potentially fraudulently, by a company they have no relationship with.

Some 61% said they wouldn’t report it, and of these, 70% said they wouldn’t do so because they didn’t know that they could or should officially report the contact.

The research by life assurance firm Phoenix Group found that when broken down by age, nearly half (48%) of over 55s would report a potential scam, while only a third of 18 to 34-year-olds and 35 to 54-year-olds would do so (33% and 34% respectively).

Phoenix said that any person who receives a cold call, even if they’re in their 20s, 30s or 40s, should report it because anyone can be scammed if the fraudsters are able to obtain personal information such as a signature, letter of authority, copy of passport or a driving licence.

The firm also asked respondents how they had reacted to being cold contacted. Some 7% of those surveyed said they had released some or all of their pension savings as cash as a result of the call, text or email. An additional 14% said they had contacted the person or organisation sending the message, while a further 15% had considered doing so.

How to report a potentially fraudulent cold contact

Once presented with the options on how to report fraudulent activity, the 2,000 consumers were asked where they would report this potentially fraudulent cold contact. Here’s what they said:

  • 36% to their pension provider
  • 32% to Action Fraud
  • 23% to Pension Wise
  • 20% to the FCA
  • 20% to the police
  • 14% to the Information Commissioner’s Office
  • 6% to the Money Advice Service
  • 6% to someone else

These are the main authorities to report fraudulent activity.

Philip Kline, intelligence and investigations manager at Phoenix, said “Too many people don’t know how to recognise a scam and, if they’re suspicious, they don’t know where or how to report it. They’re therefore at risk of losing their life savings.

“We welcome the government’s proposal to ban pension cold calling, which will go some way towards addressing this, but we believe it’s not enough. We advocate that this ban should be extended to include all forms of electronic, written and face-to-face communications, and not just telephone calls.”

How to avoid being the victim of fraud

Phoenix recommends that consumers follow these tips to avoid being a victim of fraud:

  1. Don’t allow yourself to be pressured into making a decision quickly. Pressure to make quick decisions may well increase the chance of you making a poor decision and is also an indicator of suspicious activity.
  2. Think about the contact you have received. Is this how the company usually contacts you? Would your pension provider really text you about a financial opportunity? Think about whether it’s sensible for the company to make contact in that way.
  3. Do you need to pay up front? You should never have to pay to access funds that are yours.
  4. If it sounds too good to be true, it probably is. Sometimes an offer may be articulated in a way that will not arouse suspicion. Think very carefully about the risks and the proposed benefits.
  5. Be wary of any offers to access your pension early, especially before the age of 55. Ignore any unsolicited contact you receive on the subject – this could be via phone, text message, online, in person or the post. Watch out for elaborate sounding investments, particularly those based overseas. Check the FCA ScamSmart warning list for known investment scams.
  6. Don’t hand over personal data until you know the company you are dealing with is regulated. If you have already done this and are concerned about how it might be used, contact your provider who can add additional security levels to provide further protection.
  7. If you are unsure, you can call Pension Wise on 0800 138 3944, The Pensions Advisory Service on 0300 123 1047 or the Citizens Advice consumer service on 03454 04 05 06. To report suspected fraud you can call Action Fraud on 0300 123 2040 or visit http://www.actionfraud.police.uk.

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