A record number of people have sought information about pension scammers since the launch of the ScamSmart website, despite more than half of UK retirees confident that they are likely to spot a fraudulent scheme.
ScamSmart, a joint campaign between the Financial Conduct Authority (FCA) and The Pension Regulator (TPR) to tackle pension scams, was rolled out over the summer of 2017.
Thirty-one thousand people visited the website in the days leading up to the launch, jumping to a staggering 173,000 after it went live.
The campaign is intended to highlight the threat of pension scams, as research by the regulators shows that over half (52%) of 45-to-65-year-olds do not believe that they will fall victim to fraud.
However, data for 2017 shows that, on average, victims of pension scams lost £91,000 ($117,000, €102,000) each.
Banning cold-calling
The most common methods for scamming people is by cold-calling, offering free pension reviews and promising high rates of return.
A ban on cold-calling is being discussed by the UK government but it’s already been delayed. HM Treasury, however, said that regulations to ban pension cold-calling will be laid out at the beginning of 2019.
“Our research shows that many pension holders believe they are too savvy to be scammed. But pension scams are often very sophisticated and difficult to spot. Scammers will target people from all walks of life and with any size pension” said Mark Steward, executive director of enforcement and market oversight at the FCA.
Guy Opperman, the minister for pensions and financial inclusion, also urged pension holders to seek advice before making any drastic decisions. “I would urge savers to always exercise caution and seek independent guidance or advice before making important financial decisions – free, impartial guidance is available from Pension Wise or The Pensions Advisory Service.”
The ScamSmart campaign was welcomed by pension experts, but they are urging the government to tackle scammers more quickly.
Ban may not deter scammers
Jon Greer, head of retirement policy at Quilter, said: “Despite the cold-calling ban being lauded as one of the ways to combat pension scams, its delay has frustrated many people, albeit the government is grappling with all of the nuances and complications of its introduction.
“A ban may not necessarily deter the scammers, but it is clear campaigns to raise awareness, like that launched earlier this year by TPR and the FCA, send a clear message that will put people on their guard.”
Similarly, Tom Selby, senior analyst at AJ Bell, said: “Alongside the forthcoming ban on pensions cold-calling, an ongoing commitment to communicating the dangers of scams to the public should help ensure more savers are confident enough to reject the overtures of the snake-oil salesmen flogging these dodgy schemes.
“By doing this we should build financial resilience in the UK, equipping people with the essential tools and information they need to protect themselves.”
