Online pension scams are on the rise
More than two thirds of savers believe that they would be able to spot a pension scam if they saw one. However, the Financial Conduct Authority (FCA) says that this consumer confidence may be misplaced. Since January, over 2m has been lost to pensions scams. The regulator has warned that savers are nine times more likely to accept ‘advice’ from someone online than a stranger in person.
Research from the FCA, found savers are considerably more likely to be deceived by scammers’ tactics online than they would in person. The average loss to pension scams this year was 50,949, according to complaints filed with Action Fraud – more than double last year’s average of 23,689.
Online scammers are not being selective, with pension pots big and small being targeted. Reported loses range from 1,000 to as much as 500,000. The regulator found pension holders were five times more likely to be drawn in by a free pension review from a stranger online than someone in their local pub.
In a response to try and tackle this, the regulator has revamped the messaging of their scams campaign, urging savers to “ flip the context”, to help make scams easier to spot.
“just over a third are not able to recognise time-limited offers as a sign of a scam.”
Mark Steward, executive director of enforcement and market oversight at the FCA, said:
“Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that.”
“It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.”
The FCA did find that half of pension savers were unlikely to make an ‘impulse buy’ in general, however, just over a third are not able to recognise time-limited offers as a sign of a scam.
The guidance from the FCA is this:
Whether you are on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life.
The FCA have said they are concerned about the over-confidence of savers as this could lead to them letting their guard down and failing to check on the firms in which they are dealing with.
When dealing with and receiving advice from financial professionals, savers can visit the FCA register to check whether their adviser is registered and see if there are any warnings attached to them.