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A multi-agency task force of government, regulators, financial services bodies and criminal justice agencies are warning savers to be vigilant of the threat that scammers pose to their pensions.

Support is now widely available in the fight against scammers, and now savers are urged to arm themselves with the facts to recognise the hallmark of scams and to protect themselves.

Scammers will often contact victims out of the blue offering them early access to their cash, or promises of get-rich-quick schemes, but the reality is they are nothing more than elaborate hoaxes designed to spirit away people’s hard-earned money.

One man came within a whisker of handing over his entire pension pot of £90,000, but avoided doing so after checking with official government services.

He said:

To this day I still find it unsettling that I may have been one decision away from losing my entire pension pot.

My advice to anyone who suspects a scam is to call Pension Wise or The Pensions Advisory Service (TPAS) and certainly don’t make any decision on your pension until you speak to an expert.

Minister for Pensions Baroness Ros Altmann said:

The criminals behind this illegal activity often lay a sophisticated trap complete with glossy brochures and professional websites that make them look highly credible. Don’t fall for it.

Their aim is to catch you off your guard so they can steal your hard-earned savings. Scammers wreck people’s lives; it really is as plain and simple as that.

If you suspect a scam, please report it to Action Fraud or contact The Pensions Advisory Service.

Tips for staying safe

A number of organisations have joined forces to highlight the problem as part of Citizens’ Advice Scams Awareness Month. Together they have released 5 top tips for staying safe.

1. Beware anyone calling out of the blue offering a free pensions review, it’s probably a scam. The best thing to do is to hang up.

2. Beware companies offering early access to your money. This is rarely in anyone’s interests and you could be hit with exorbitant early exit fees plus a hefty tax bill.

3. Beware companies offering to help you trace lost pensions or obtain a pension statement. These services are free from the government website GOV.UK. Scammers often charge for these services and use them as a way to gain your confidence and then steal your cash.

4. Always contact The Pensions Advisory Service for free and impartial guidance to talk through your options and learn about how to spot a scammer.

5. Remember: if someone promises you a rate of return that sounds too good to be true, it probably is.

Citizens Advice believes half of all scams reported to it are from people over the age of 55.

Gillian Guy, Chief Executive of Citizens Advice, said:

Fraudsters aren’t just trying to tempt people’s pension pots away with offers of pension schemes; they also try to entice people to hand over their money with big investment opportunities such as property abroad and fine wines.

Think twice before responding to a cold call or an advert offering a free ‘pension review’, or high-return investment. If you think you’ve been targeted by a scammer, report them to the authorities.

The hidden nature of pension scams is such that it is difficult to calculate exactly how much money has been lost, although recent industry estimates suggest it is close to £1 billion.

Project Bloom, a government led task force, was set up to tackle pension fraud. A number of police raids have taken place, 15 scam websites have been suspended, and the National Crime Agency has snapped up 70 domain names to prevent them from falling into the hands of criminals.

In addition, The Pensions Regulator, which is investigating 9 cases of suspected pension scams, has refreshed its on-going Scorpion campaign on Monday 27 July to help safeguard savers and support trustees, working across government and with a range of partners. The latest updates and information are available at www.pension-scams.com

Chief Executive of The Pensions Regulator Lesley Titcomb said:

The people behind pension scams are sophisticated and well organised, and we are working hard with our partners to disrupt their activity, take legal action when necessary, and alert the public to the dangers posed by rogue schemes.

Our message is clear: check the facts before you make an irreversible decision. A lifetime’s savings could be lost in a moment.

While we are committed to investigating scams and bringing those people behind them to justice, the chances of recovering money once it’s been handed over are slim.

The Pensions Advisory Service chief executive Michelle Cracknell said:

Prevention will always be the best cure when it comes to keeping your pension safe from scammers and we would always recommend that you talk to us before doing anything with your pension.

We provide free and impartial guidance on your options and will be able to tell you how to check the credentials of the companies that you are dealing with.

More information

Project Bloom

Project Bloom, a multi-agency group across government led by the National Crime Agency, was set up to tackle pension liberation fraud in a co-ordinated way. Members include:

• Department for Work and Pensions (DWP)
• The Pensions Regulator
• Financial Conduct Authority (FCA)
• HM Revenue & Customs (HMRC)
• Serious Fraud Office
• National Fraud Intelligence Bureau
• National Crime Agency

Pension scheme registration

The HMRC’s pension scheme registration has been tightened, as called for by industry, and a “fit and proper person” test has been introduced.

HMRC can refuse to register a scheme, or de-register an existing scheme if the scheme administrator is deemed to be not a fit and proper person.

Campaigns

Public information campaigns such as The Pension Regulator’s Scorpion Campaign and the Financial Conduct Authority’s ScamSmart campaign, alert people to the warning signs of scams.

Individuals who spot fraud should report it to the UK’s national fraud and internet crime reporting centre, Action Fraud on 0300 123 2040.

Case studies: pensions scams

Two members of the public narrowly avoided handing over their retirement savings after speaking to The Pension Advisory Service.

They have now urged anyone who is contacted out of the blue to contact this free and impartial service before doing anything.

Nearly lost entire £90,000 pot

One man nearly lost his entire £90,000 pot to a scheme purporting to be investing in commercial property. He said:

To this day I don’t really know what made me suddenly say ‘no’, but I’m glad I did, I dread to think what would have happened. It sounded too good to be true and now I know it was.

He was contacted in 2014 and offered a free pension review. After persuading him to sign a form authorising the release of his pension information, he was then paid a visit at work by someone posing as an independent financial adviser who offered him the chance of investing his money in overseas property. He said:

He came armed with a glossy, very legitimate looking brochure, explaining that my money would be invested in a fund registered off-shore. Paperwork was couriered to him asking him to sign an agreement to transfer his savings.

At this point I just began to feel uncomfortable and decided that it was too much of a risk. I feel lucky though, on another day I could have easily signed those forms.

Suspecting a scam he passed on details to Action Fraud, the hotline for reporting pensions and financial scams. He also called The Pension Advisory Service who were aware of the scammers. He added:

My advice to anyone who suspects a scam is to call the Pensions Advisory Service or Pension Wise and certainly don’t make any decision on your pension until you speak to an expert.

To this day I still find it unsettling that I may have been one decision away from losing my entire pension pot.

Harassed for more than 6 months

In a separate incident, scammers harassed a woman for more than 6 months, using intimidating methods to encourage her to hand over her pension.

But her suspicions were raised early enough to avoid the trap.

After being cold called, and unsure of how much her pension was worth, she signed a form authorising the release of information to the scammers. She said:

They were so personable on the phone, incredibly manipulative, playing on my insecurities and persuading me that they could organise my finances.

She began to receive up to 4 phone calls a day pressurising her to release her pension into offshore investments.

Worried about the information she had already disclosed, she called the Pension Advisory Service, who told her that the company was not FCA registered and she should not release any further information.

But that did not stop the calls, which were followed up by a constant stream of letters littered with jargon. Already suffering from ill health, the worry led to sleepless nights and panic attacks.

Despite asking the scammers to stop calling her, they then started harassing her on her door step. She said:

I made one small enquiry and 6 months later my self-esteem is shattered. I am cautious and have problems trusting any financial advice. Worst of all my health has suffered.

When they found out how much my pension was worth they laughed at me. They deliberately made me feel small and made me fear that I would have little to speak of in my old age.

She now wants to help other people from receiving the same treatment that she did.

When someone cold calls your home, alarm bells should start ringing.

Scammers will try everything to appear legitimate. In my case they intimated that they were part of a government scheme.

It could have been anybody. I didn’t think of myself as vulnerable, I just made a mistake.

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