Data from Action Fraud show a steady fall in pension scam reports from 1,788 in 2014 to 358 in 2020 – a reduction of almost 80 percent. However, there has been an increase in reporting so far this year, with 107 reports of pension fraud received in the first three months of 2021. This is an increase of almost 45 percent when compared to the same period in 2020.
It has been reported that £1.8million has already been lost in fraud in the first three months of this year. The Action Fraud has rolled out warnings for savers to be extra cautious with their pensions.
Pension scams often include free pension reviews, `too good to be true` investment opportunities and offers to help release money from your pension, even for under 55s, which is not permitted under the pension freedom rules.
Pauline Smith, Head of Action Fraud, said:
`Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack of any kind of empathy for their victims, who can often lose their whole life saving to these scams.
`We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to fraud and it’s nothing to feel ashamed or embarrassed about. It’s incredibly important that instances of pension fraud and attempted scams are reported to Action Fraud.
`Every report helps police get that bit closer to the people committing these awful crimes. Reporting to Action Fraud also allows our specialist victim support advocates to provide people with important protection advice and signpost them to local support services.
Tips on how to AVOID getting scammed.
Cold calling about pensions is illegal and a likely sign of a scam. Cold calls used to be scammers` most common method of approach. But since the cold-call ban was online models. Making contact through social media, or will use friends and family to reach clusters of people. Others will rely on established practices like offering a free pension review.
Common signs of pension scams:
• Phrases like `free pension review’, ‘pension liberation, loophole, saving, advance, one-off investment, cashback.
• Guarantees you can get better returns on pension savings
• Help to release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise.
• High-pressure sales tactics – time-limited offers to get the best deal; using couriers to send documents, who wait until they’re signed
• Unusual high-risk investments, which tend to be overseas, unregulated, with no consumer protections.
• Complicated investment structures
• Long-term pension investments – which often mean people who transfer in do not realize something is wrong for several years.