The Pension Scams Action Group (PSAG) has set out eight common signs of a pension scam as it becomes increasingly concerned savers face a potentially increased risk from scammers seeking to cash in on economic uncertainty.
The group - a multi-agency taskforce including The Pensions Regulator (TPR), the Financial Conduct Authority (FCA) and the Money and Pensions Service (Maps) - said its warning comes amid fears that recent headlines over squeezed household finances may leave savers more vulnerable to scammers.
It said common signs of a pension scam include:
- Being contacted out of the blue
- Phrases like ‘pension liberation', 'loan', ‘loophole', ‘savings advance', ‘one-off investment', ‘cashback'
- Guarantees of better returns
- Help to release cash from a pension before the age of 55, with no mention of the HM Revenue & Customs tax bill that can arise
- High-pressure sales tactics - time-limited offers to get the best deal; using couriers to send documents, who wait until they're signed
- Unusual high-risk investments, which tend to be overseas, unregulated, with no consumer protections
- Complicated investment structures
- Fixed-term pension investments - which often mean people who transfer in do not realise something is wrong for several years
The group said savers should also be on guard against recovery room scams or secondary scamming - which sees fraudsters approach people who have already been scammed and offer to help them get their money back in return for a fee.
TPR executive director of frontline regulation and PSAG spokeswoman Nicola Parish said: "Anyone who receives an unexpected call about their pension - even if the call appears to come from a trustworthy organisation - should hang up. Reputable callers are unlikely to call out of the blue and they won't ask for money upfront to pay for their services."
Pension scheme trustees have also been called on to remain vigilant to the risk of scams and suspicious transfer requests.
Trustees are asked to follow best practice in protecting savers from scams - including warning them of the heightened risk of pension and investment scams in times of uncertainty and providing some of the common signs of a scam.
PSAG - the group formerly known as Project Bloom - is a voluntary multi-agency taskforce to tackle pension scams.
It co-ordinates and targets efforts to combat pension scams and fraud through education, prevention and enforcement. Its core strategy group members include the TPR, the FCA, Maps as well as the Department for Work and Pensions, National Economic Crime Centre and the Pension Scams Industry Group. Other partners are involved in supporting the group with communications, intelligence, operations and victim support.
Members of the public can get free guidance about their money and pensions via www.moneyhelper.org.uk or by calling 0800 138 7777.
