Pension pot scams cost £91,000 per victim since rules relaxed.
A new campaign has been launched in order to prevent more people being scammed by bogus pension schemes.
A spate of highly sophisticated scammers have convinced more than 250 people to invest their life savings into pension schemes that failed to materialise, according to Action Fraud.
In total, 253 victims reported to Action Fraud they had lost more than £23million to pension scams in 2017, averaging £91,000 per person.
Nicola Parish, executive director of The Pensions Regulator said: “£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings.
“If someone cold calls you about your pension, it’s probably an attempt to steal your savings. Our message is clear – hang up and report it.”
How did victims lose £91,000 to pension scams?
Watchdogs have warned there are several tactics that fake companies use to trick unsuspecting victims out of their hard earned cash.
One of these is to offer a “free pension review”, with cold calling the most common method of offering their services.
Other tactics include:
Unexpected contact pensions via phone, post or email
Promises of guaranteed high profits and minimising or avoiding speaking of the risks
Offering out of the ordinary or overseas investments that aren’t regulated by the Financial Conduct Authority (FCA) e.g. overseas hotels, forestry, green energy schemes
Putting you under pressure to make a quick decision, for example making time-sensitive offers
Claiming to offer the ability to free up money from a pension (which is usually only able to be accessed from the age of 55)
How can you protect yourself from a pension scam?
The FCA and TPR recommend four steps to protect yourself and your money from a scam.
One of these is to reject any unsolicited or unexpected pension offers, regardless of how they are made – online, social media or phone call.
If you are tempted to switch your pension deal, check who you are dealing with before making any changes.
Take your time, don’t allow anyone to rush you into making a decision about your pension.
If you are unsure or simply want another opinion, consider seeking out impartial information and advice.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The size of individual pension pots makes pensions savings an attractive target for fraudsters.
“That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.
“Pension scams can cause victims significant harm – both financially and mentally.
“If you are ever in doubt about a pension offer, visit the ScamSmart website.”