Pensions

Pension scam in the UK continues unabated

Pension savers have called for action on pension clone fraud which are carried out by foreign-based cyber-criminals

Pension scam in the UK continues to grow as an increasing number of pensioners fall to pension scams. According to the latest figures, pensioners were duped of at least £200m last year, calling for serious attention to the plight of pensioners in the country. Now, over three-quarters or 79 per cent of UK savers want tougher checks to stop pension fraud.

Trade body the Pensions and Lifetime Savings Association (PLSA) polled over 2000 UK adults regarding their views on the growing problem of pension fraud in the country. According to the poll results, 17 per cent of those interviewed had been contacted by a ‘company’ other than their pension provider to discuss transferring their funds. Out of these, a majority (11 per cent) were contacted multiple times. Equally concerning was the fact that over a quarter (29%) of those interviewed missed the most obvious scams when presented with a selection of scenarios – that equates to a staggering 14.8 million UK savers. These figures are alarming as new figures from watchdog the Financial Conduct Authority (FCA) show that pension scammers made away with almost £200m from pensioners over the past year.

Investigations into ‘clone fraud’ have doubled over that period with some victims losing hundreds of thousands. The watchdog had investigated 90 cases in 2015, 126 in 2016 and 157 last year. Pensioners are defrauded by cyber-criminals based outside the UK who persuade pension-savers to transfer funds to their own fake companies which are identical to the real and established ones. These websites are carefully designed to appear convincing, with contact details altered slightly to avoid suspicion.

The FCA always advises savers to check the legitimacy of websites by first checking its Register to see if they are listed with it. It also advises savers to avoid responding to cold-calling or unsolicited emails.

Although, the government is introducing a ban on pension cold-calling, the PLSA says it needs to go further. It is asking the government to introduce an authorisation regime for pension schemes, so consumers know who they’re dealing with.

PLSA policy lead, James Walsh said that pension scams come in all shapes and sizes as scammers become increasingly sophisticated. Whilst the government’s ban on cold calling is welcome it is only part of the solution.

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