The campaign, aimed at pension holders aged 45 to 65, looks to raise awareness of the most common tactics used by scammers to initiate pension fraud.
In a poll commissioned by the regulators, almost a third (32%) of pension holders aged 45 to 65 said they would not know how to check whether they are speaking with a legitimate pensions adviser or provider.
Further, research by Action Fraud, the UK’s national fraud and cybercrime reporting centre, found that 253 victims lost more than £23m to pension scams in 2017, equating to an average loss of £91,000 per victim.
Cold calling is the most common method used to initiate pension fraud, the FCA and TPR said.
“If someone cold calls you about your pension, it’s probably an attempt to steal your savings."
One of the most common tactics of scammers is to offer a “free pension review”. The regulators reported that one in eight 45 to 65-year-olds surveyed (12%) said they would trust an offer of a “free pension review” from someone claiming to be a pension adviser.
While cold calling is currently the most common tactic, other scams include unexpected contact via post and email and putting people under pressure to make a quick decision.
Another common tactic used by scammers is to offer unusual overseas investments that are not regulated by the FCA, such as overseas hotels, forestry and green energy schemes.
International Adviser has written extensively on such schemes over the years.
Mark Steward, executive director of enforcement and market oversight at the FCA, said the size of individual pension pots makes pensions savings an attractive target for fraudsters.
“That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.
“Pension scams can cause victims significant harm – both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website,” Steward said.
Nicola Parish, executive director at the TPR, said £91,000 is a “huge amount” of money for someone approaching their retirement to suddenly have ripped from their savings.
“If someone cold calls you about your pension, it’s probably an attempt to steal your savings. Our message is clear – hang up and report it,” she said.
TV, radio and social media
The joint advertising campaign will show the contrast between the impact on the victims of pension scams and the lifestyles enjoyed at their expense by the criminals.
Using TV, radio and social media adverts, it urges anyone who is contacted about their pension to visit ScamSmart before they transfer any funds, so that they do not end up becoming the victim of a scammer.
FCA and TPR are part of Project Bloom, a multi-agency taskforce working to combat pension scams.
The taskforce includes the Department of Work and Pensions, HM Revenue & Customs, HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, The Pensions Advisory Service, and the National Crime Agency.
The value of good advice
Vince Smith-Hughes, a retirement income expert at Prudential, said the campaign launch highlights why high-quality financial advice is good value for money.
“It will provide people with a financial plan for retirement, help them select the right type of retirement plan and also avoid fraudsters and inappropriate investments,” Smith-Hughes said.
Kate Smith, head of pensions as Aegon, said it is good to see the regulators launching a new campaign, as to-date their focus on consumer protection has not worked.
“Pension scams continue to ruin peoples’ lives and future retirement plans, yet a ban on cold calling, to help snuff out the threat of fraudsters, remains on ice. Government needs to treat this as a priority. Naturally consumers feel exposed and angry when they get taken in.
“Educating the public is a step forward, but consumers are crying out for a solution now, which can only come through a joined up approach between the regulators and the government.
“Until then, people’s savings will continue to be treated as a honeypot for fraudsters, who constantly find new ways to trick them and steal their lifetime savings,” Smith said.