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Scam Victims Lose 22 Years Savings in 24 Hours

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Scam Victims Lose 22 Years Savings in 24 Hours

Unread postby Big Al » Fri Nov 08, 2019 4:35 pm ... 00316.html

Morningstar UKNovember 8, 2019, 4:05 AM EST

Victims of pension scams could lose an average of 22 years’ of savings in just 24 hours, according to research from The Pensions Regulator and Financial Conduct Authority.

The analysis by the two regulators shows that the average victim of pension fraud loses £82,000 - and while it typically takes a saver 22 years to build up that pot, they could lose it in just a day.

Nearly a quarter of people surveyed admitted they would decide on a pension offer within 24 hours and a worrying 63% of people would trust a pension offer they received out of the blue.

It is easy to assume that scammers prey on those who are less educated or confident in dealing with their finances, but the regulators found that those with a university degree are 40% more likely to accept a free pension review from a company they’ve not dealt with before than those without a degree.

James Jones-Tinsley, self-invested pensions specialist at Barnett Waddingham, says the research shows that consumers from all walks of life are susceptible to losing hard-earned sums.

"Even the savviest of savers are at risk,” agrees Tom Clementson, director of consumer at secure payments solution Shieldpay.

Scams have been on the rise since the introduction of pension freedoms in 2015. New rules that came into effect gave savers more flexibility over how and when they access their retirement savings. But it has also become an opportunity for fraudsters to con people out of their life savings.

Part of the problem may be that many savers are overconfident in their own abilities to handle their finances. Some 63% of those surveyed said they are confident making their own financial decisions; it comes just weeks after research from the FCA found that half of people hitting retirement are not taking advice.

Recent scandals involving the transfer of defined benefit to defined contribution schemes may also have played a part. But the FCA’s Mark Steward, executive director of enforcement and market oversight, insists that intermediaries play a key role in stopping savers falling victim to scams: “Reject unsolicited approaches offering ‘help’ with your pension and get advice from an FCA authorised firm before making big changes to your pension fund.”

Is Technology the Key?
Shieldpay’s Clementson believes that technology, which has helped scammers to reach more people in recent years, holds the key to preventing scams in the future. He argues that full identity verification and background checks could deter scammers in the first place.

The regulators' ScamSmart campaign has the following advice:

Reject unexpected pension offers whether made online, on social media or over the phone

Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA helpline on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA

Don’t be rushed or pressured into making any decision about your pension

Consider getting impartial information and advice

In January this year a ban on pensions cold calling came into effect to protect people from at least one channel of unsolicited scams; nearly 11 million cold-call pension phone calls and text messages were made or sent in 2018, according to Citizens’ Advice. Jones-Tinsley says that now the ban is reaching its first anniversary, the Treasury, FCA and Pensions Regulator need to analyse the data to look at whether it has been effective.
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