How to stay scam smart

Pension scams have cost members more than £26.4mn in recent years, data has revealed.

And with the cost-of-living crisis, more members may be enticed into accessing their pension savings early. Meaning increasing numbers are becoming vulnerable to scams.

The problem shows no signs of going away, so it’s even more important to remain vigilant and aware of potential scams.

We’ve put together some ways your employees can protect their pension and investments.

What to look out for

Spotting a scam isn’t always easy and the promise of generous returns could be extremely tempting.

Fraudsters are also becoming more sophisticated. They’ll attempt to make their sales pitch as attractive and authentic as possible by sharing fake reviews, using convincing marketing and websites or claiming to be regulated.

But the FCA says there are some tell-tale signs to look out for.

• It’s unexpected – Scammers often cold-call their victims. But they can also get in touch by email, SMS (text) or by post, through social media or even word of mouth.
• They put people under pressure – Victims might be told they only have limited time to act. Or offered a bonus or discount if they act by a set date. People should always take time to consider the options and never rush a decision.
• They promise unrealistic returns – To make it more tempting, scammers often promise impressive or guaranteed returns. They’ll even play down the risks. If it sounds too good to be true, it often is.
• They offer a free review – Scammers often offer a free pension review and the chance to release money early, even if the victim is under the age of 55. Legally, unless there are exceptional circumstances, pension benefits can only be accessed after age 55 (57 in 2028).

How to stay vigilant

Reject unexpected offers

If employees are contacted out of the blue about an investment opportunity, chances are it’s a high-risk investment, or a scam. The safest thing to do is to hang up or ignore an unexpected text or email.

Don’t give personal information

Employees should never click on any link in an email or text message from senders they don’t know. And never give bank details, login or password information to any suspicious or unsolicited contact.

If they have any concerns about the information they’re asked to provide, do not continue with the log in.

Anyone can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls or texts they receive.

Check the company is FCA-authorised

The FCA authorises almost all financial services firms in the UK. If the person or company contacting your employees isn’t authorised, it could be a scam. Check their registration details on the Financial Services Register. This is good practice before interacting with any new firm offering financial help or promotions.

Always access the register from the official FCA website, not through links in emails or on the website of a firm offering the investment. It’s possible to direct that link to a page that looks like the FCA register, but isn’t.

Check it’s not a clone firm

Some scammers try to deceive investors by pretending to be a genuine firm (called a clone firm). Employees can make sure they’re contacting the genuine firm by calling their switchboard number, listed on the FCA Register. Remember scammers can try to pretend to be any company, so this should apply to all companies – including big firms and well-known brands.

If there aren’t any contact details on the FCA Register or if the firm claims they’re out of date, check by calling the FCA consumer helpline on 0800 111 6768.

If you’re dealing with an overseas firm, find the regulator in that country and check the scam warnings from foreign regulators.

Check the FCA Warning List

Employees can use the FCA Warning List to see if the firm contacting them is known to be operating without the FCA’s authorisation.

Even if a firm isn’t on the FCA warning list, it might still be a scam. Scammers will change names and details all the time.

How to report suspicions or scams

Direct employees to contact their bank or investment provider immediately if they think they’ve fallen victim to a scam. The quicker they express their concerns the faster their provider can help.

Anyone who has been defrauded or experienced cybercrime should report it to Action Fraud either online or by calling 0300 123 2040.

If employees have started a pension transfer and now suspect a scam, they should contact their pension provider straight away. They might be able to stop it.

You should also report what’s happened to the FCA either online or by calling 0800 111 6768.

Consider the emotional impact of fraud

Falling victim to fraud can have a huge emotional impact. Victims can often feel embarrassed and don’t want to tell people what’s happened, even though they’re not to blame.

Employees can contact Victim Support either online or via their support line on 0808 168 9111 to talk to someone about how they’re feeling. They can also contact The Samaritans at any time of the day or night on 116 123.

If a scam has left them struggling financially, they can also contact Citizens Advice to help them find a way forward. They can speak to an adviser through its national phone service, Adviceline, on 0800 144 8848 if they live in England and 0800 702 2020 if they live in Wales.

Get impartial information or advice

The FCA suggest people should seriously consider seeking financial guidance or advice before changing their pension and investment arrangements. MoneyHelper provides free independent and impartial information and guidance.

If employees are over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through pension and retirement options.

Employees can also use a financial adviser to help them make the best decision for their personal circumstances. If they do opt for an adviser, make sure they’re regulated by the FCA.

If anyone has any concerns or suspicions about a potential scam, contact the FCA and Action Fraud immediately.

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