Phoenix Group offers tips on how to avoid pension scams
Tommy Burns, Risk and Financial Crime Manager at Phoenix Group and Deputy Chair of the Pension Scams Industry Group is marking Talk Money Week with tip on how to avoid pension scams…
Talk Money Week encourages people to discuss their finances, share the burden of any monetary issues and seek advice on managing their money to protect their financial futures. Research shows that people who “Talk Money” make less risky financial decisions. This is incredibly important, particularly when it comes to avoiding scams. It’s vital for savers to be vigilant, be aware of the threat posed by scammers and to know some of the tell-tale signs.
Pension scams in particular can have a devastating impact, as scammers rob hard-working pension scheme members of the retirement they have worked towards for years and have the potential to destroy people’s lives. Those who fall victim can face financial ruin as a result of passing over personal data or just one fateful signature on a piece of paper which transfers their pension into the hands of the scammers.
It is extremely worrying to see that financial fraud is growing, partly as a result of Covid-19 and the additional financial pressures that many people are facing. What’s more, the methods fraudsters use are constantly evolving. That said, there are some common traits to pension fraud, and one of the very best ways to help avoid being scammed out of your life savings is to learn more about the risks so you are better equipped to recognise potential red flags in order to protect your pension pot.
Phoenix recommends that pension savers follow these key tips to help avoid being a victim of fraud:
• Don’t allow yourself to be pressured into making a decision quickly. Pressure to make quick decisions may well increase the chance of you making a poor decision and is also an indicator of suspicious activity.
• Think about how you have been contacted. Is this how the company usually contacts you? Would your pension provider, for example, really text you about a financial opportunity? Think about whether it's sensible for the company to make contact in that way.
• Be wary of any offers to help you access your pension early, before the age of 55. Ignore any unsolicited contact you receive on the subject - this could be via phone, text message, online, in person or the post. Watch out for elaborate sounding investments, particularly those based overseas. Check the FCA ScamSmart warning list for known investment scams. http://scamsmart.fca.org.uk/
• Do you need to pay up front? You should never have to pay to access funds due to you.
• If it sounds too good to be true, it probably is. Sometimes an offer may be articulated in a way that will not arouse suspicion. It may be a promise of an amazing return on your investment. Think very carefully about the risks and where your money is going.
• Don’t hand over personal data until you know the company you are dealing with is regulated. If you have already done this and are concerned about how it might be used, contact your provider who can add additional security levels to provide further protection.
If you are unsure, you can call Pension Wise on 0800 138 3944, The Pensions Advisory Service on 0300 123 1047 which are both provided by The Money and Pensions Service (MaPS) or the Citizens Advice consumer service on 03454 04 05 06. To report suspected fraud you can call Action Fraud on 0300 123 2040 or visit http://www.actionfraud.police.uk