Pensions Scams and Fraud - How to Stay Alert
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Research released by the ONS has found a substantial increase in fraud and computer scams, especially for ‘advance fee fraud’ – where victims are promised a significant share of a large sum of money, in return for a small up-front payment.
Fraud offences increased by 25% (to 4.5 million offences), with most scams being cyber-related. Computer misuse increased by 89%, driven by a large increase in unauthorised access to personal information.
Keep reading to discover the best ways of avoiding pension scams and fraud.
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We’ve found a recent rise in online scams targeting the over 55’s. Over the last 12 months, online searches for those looking for support after falling victim to pension and investment scams has surged:
| Search Term | How Much More Are People Searching For It? |
|---|---|
| ’Can someone steal your pension?’ | + 133% |
| ’Investment scam’ | + 50% |
| ’Reporting pension fraud’ | + 50% |
| ’Computer fraud’ | + 33% |
| ’State pension scams’ | + 33% |
| ’Pension fraud’ | + 23% |
Source: Internal analysis from Google's Keyword Planner over the last 12 months (October 2021-September 2022)
Why Elderly Scams and Pension Fraud Are on the Rise
It isn’t surprising to see an increase reported by the ONS for people falling victim to scams – especially during the pandemic. Our online habits changed, with many people purchasing products and services online. Unfortunately, this made us more susceptible to fraud, with scams becoming even more sophisticated.
The older generations used technology more during the pandemic, and unfortunately, fraudsters have exploited their uncertainty to transfer large sums of money.
Over the last 12 months, our new research has shown this trend has unfortunately continued, with a huge spike in pensioners seeking support after falling for a scam, coinciding with the rising cost of living. This will place enormous stress on the wellbeing of the older generations, risking feelings of isolation, poor mental health, and stress-released health issues.
Anyone can fall victim to fraud, and it isn’t anything to be ashamed of. Scammers will often try to persuade you to remove some or all money from your pension fund. They may ask you to invest in unusual, high-risk investments, including overseas property. Or they may contact you out of the blue for a free pension review, promising advances on your pension pot.
Thankfully, there are ways to reduce your risk of falling victim to fraud. We must raise awareness about staying savvy to scams – as well as sharing the best ways to report anything suspicious.
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How to Avoid Pension Scams and Lower Your Risk of Pension Fraud
Frauds are becoming even more sophisticated, so it’s important to stay clued up on the warning signs of pension and investment scams. They can lead to you or your loved one losing a lifetime’s worth of savings in one moment, so you must stay cautious and make sure your family members are similarly clued up.
Watch out for warning signs
Scammers will often contact you unexpectedly, whether this is via a phone call, text message or email. Remember – since January 2019, there’s been a ban on cold-calling about pensions. So, if you do get contacted and offered a free pension review or investment opportunity, it’s likely that this is a scam.
If this happens, simply hang up. You should also ignore any unsolicited text messages promising you more money.
Seek financial guidance first
If you’re keen to review your pension, there are ways to receive free, impartial advice, including Money Helper’s Pension Wise service. Before changing any of your pension arrangements, first seek out impartial financial advice from a reputable source.
Take the time to check investment opportunities before transferring over any money. Make sure that whoever you’re dealing with is regulated by the Financial Conduct Authority (FCA) and they’re authorised to provide you with financial advice.
Keep up to date with the latest scams
It’s no surprise that fraudsters are becoming even more sophisticated. An important part of reducing your risk of falling victim to fraud is staying clued up on the latest scams. Age UK provides information on the latest scams – including fake Ukraine fundraisers and fake energy refund emails.
Speak to your loved ones
If you or your loved ones have fallen victim to fraud, don’t suffer in silence. Anyone can be susceptible to scams, especially as they become more sophisticated. Nowadays, even the most careful people can be caught out.
Make sure you speak to your friends and family, as it can be a huge relief to open up about how you're feeling. They can support you in reporting the fraud and help you cope with any stress, anxiety or worries you’re experiencing.
Report a scam
Most importantly, don’t feel embarrassed about reporting fraud. Some organisations can support you and will even help you track down the fraudsters. Contact the police via 101 immediately if you feel threatened, or if you’ve transferred money to the scammer in the last 24 hours.
You can also report fraud to the Citizens Advice service – make sure you note down all details about the scam, including whether you’ve transferred any money, who you’ve been in contact with and the type of information you’ve shared.
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