How to be scam smart

We all like to think that we will never fall victim to a pension scam. Yet sadly they do happen.

What is a pension scam?

There are many different types of pension scam, but what they all have in common is that they are crimes, carried out by fraudsters who want to get their hands on your money. If you fall victim to a pension scam, your lifetime savings can be lost in minutes.

Pension scams have become one of the most prolific and fastest-growing types of theft in the UK. It’s an area that is a challenge for banks, police, regulators and trading standards as well as for consumers.

Pension scams are becoming more sophisticated

Scams are becoming increasingly hard to spot: fraudsters can be well-spoken and very knowledgeable about financial markets, meaning that they can look and sound very believable and professional.

When people think of pension scams, they might think of a door-to-door salesman offering dodgy deals, but pension scammers now have an increasingly large digital presence. They can have credible websites and internet reviews – but these are not always what they seem to be and are often fake.

What should you look out for?

We recommend that you should always exercise extreme caution if someone asks you to move your money. However, there are telltale signs of pension scams that you can look out for.

  • You are being rushed into a decision or action. Your pension is a long-term investment and you should never make a hasty or short-term decision about it.
  • You are offered unusual or high-risk investments, a guaranteed return or something you are not familiar with. If someone offers a free pension review or claims to be able to help you access your pension before the age of 55, the chances are that you should just hang up.
  • You are approached out of the blue. If you have been contacted door-to-door, by telephone or by text message completely out of the blue, then you should be wary. Since January 2019, there has been a ban on cold calling about pensions, this means that unless you have requested it, you should not be contacted about your pension.
  • They give you unclear contact details. If the only contact details you have been given are a website, mobile number or PO Box then you should proceed with caution. If you are given a physical address, search it online. You may find that it is a ‘virtual’ office address, another favourite tactic of fraudsters.

If you think you have been a victim of a pension scam, you should speak to your pension provider as soon as possible. If you act quickly, they may be able to prevent a transfer of your money.  You can also report a suspected pension scam to Action Fraud.

If you’d like to learn more, take a look at the FCA’s warning list of well-known pension scams.

Introducing Scam Man & Robbin’

Making it easier for people to protect their friends and family from pension scams was the reason behind Pension Bee’s recent hackathon. We were delighted to work with them and to play our part in finding an innovative and educational way to get the message about pensions scams across.

We are proud to have been part of the winning team that created Scam Man & Robbin’. This is a fun game, designed to make a genuine difference to the way people think about fraud, and you can share it with your own friends and family. Hopefully it will help both you and them to recognise the different types of pension scam and how to avoid them.

Play Scam Man & Robbin’

You can also test your knowledge on how to identify pension scams by having a go at the FCA’s pension scam quiz.

Where you can find further information?

  • You can find more information about pension scams by visiting the free, impartial government service Pension Wise (this is now part of Money Helper Service).
  • Money Helper offers professional, independent and impartial help with pensions – for free
  • The FCA’s ScamSmart website contains a link to the FCA register, so you can see whether a firm is authorised by the FCA. It also includes a useful warning list and a pensions scam quiz, so you can learn what you need to look out for.
  • You can report an actual or suspected fraud to the police by visiting Action Fraud.
  • For further details on how to spot, avoid and report pension scams, visit Money Helper.

Frequently asked questions

How can you protect yourself from pension scams?

  • Do not give out any personal information.
  • Ask if they are a member of the Financial Conduct Authority (FCA) and check on the FCA website: However, don’t assume that the person you are talking to is the person on the register.
  • If they say they are from an official body such as The Pensions Regulator, they are not being truthful as official bodies such as this do not offer this kind of service and do not conduct themselves in this manner.
  • Do not sign or do anything until you have taken advice from a trusted professional.

What steps do you need to take if you’ve been targeted by pension scammers?

  1. Contact your pension provider. If you’ve signed up to something but have since developed some doubts, you should get in touch with your pension provider straight away. If you act quickly, your pension provider might be able to prevent a transfer of your money.
  2. If you’ve lost your savings  to a suspected pension scam, you should report it to Action Fraud. You can call Action Fraud on 0300 123 2040.
  3. For further help, you can contact The Pensions Advisory Service. Call them on 0800 011 3797 or visit their website for free pensions advice and information.

How can you check you are transferring your pension savings to a legitimate scheme?

You should always proceed with caution if you decide to transfer your pensions savings. Pension scams are becoming more sophisticated and fraudsters can have a strong online presence and a convincing website.

There are a number of ways you can make sure you are transferring your money safely:

  • You can make sure the scheme is registered by checking the FCA financial services register.
  • Take a look at the FCA ScamSmart warning list to find a list of known investment scams.
  • If you are transferring your pension savings overseas, make sure you are transferring to a ‘qualifying recognised overseas pension scheme’ (QROPS).
  • Check the HMRC registration of the new scheme. Until a new scheme’s registration is confirmed by HMRC, you will not receive tax relief on your contributions. You can ask your current pension provider to check the HMRC registration ahead of transferring your pension.