88% of people fail to identify common warning signs of pension fraud, according to a report by Citizens Advice.
There is a high prevalence of pension scam activity with regards to phone calls, posts and emails. 10.9 million people received unsolicited contact about their pension in the last year.
76% of people said they are confident in identifying a pension scam but just 12% were able to do so when a scam was presented to them.
Citizens Advice also found that scammers are changing their tactics, offering high rewards and advice into tricking people out of their pension pots.
64% said they would consider an unsolicited offer and many would only consult informal sources if the approach was authentic.
Citizens Advice has published guidance on how to identify pension fraud:
- ignore contacts that are out of the ordinary, whether in person, online, or by phone
- avoid promotional offers with more than 8% return on pension investment
- avoid any offers to access your pension before 55
- watch out for overseas based investments
- check the Financial Conduct Authority register to identify if the company approach is legitimate
- check the FCA ScamSmart warning list for known investment scams
- contact current pension provider when transferring a pension to a new scheme.
Gillian Guy, chief executive of Citizens Advice said:
“It’s difficult for consumers to stay ahead of pension scams as they evolve. Many scammers use professional looking websites and leaflets to fool their victims into signing up to free pensions advice or cold call with offers of unusually high investment returns.”