On 4 May, Nicola Parish (Executive Director, The Pensions Regulator) spoke at our Saving and Financial Wellbeing webinar on the subject of pension scams. This blog is based on her speech and calls for the industry to take action on protecting customers from pension scams. The on-demand video of the event will be available on our website in the coming weeks.
In the last three years, over £30 million of pension savings have been reported as stolen through a scam to Action Fraud.
This figure represents many hundreds of savers who have had their retirement plans destroyed. Reported losses have ranged from under £1,000 to almost £500,000. Whatever the sums involved, for the victims these are likely to be life-changing amounts. It’s hard to fully imagine the feeling of intense anguish that would result from knowing you’ve spent a lifetime carefully planning and saving for retirement, only to have it stolen from under your nose by unscrupulous pension scammers.
But it can happen to anyone. Our data shows that all pension pots can be targeted, big or small, Defined Benefit or Defined Contribution. People from all backgrounds have been targeted. Even those who consider themselves financially savvy have fallen victim to scams.
Pension scams are devastating for their victims, that much is clear. We also know the real figure lost to scams is significantly higher than the reported figure.
We know this because scams are under-reported by both victims and by the pensions industry. There are several reasons why victims don’t report scams – they may be embarrassed to admit they have been taken in, they may not realise until years later that they’ve fallen victim to a scam. They may simply not know where to report it.
When it comes to the pensions industry reporting scams, the reasons for under-reporting are less clear and, it could be argued, less valid. Certainly, there is much room for improvement. We would always encourage the reporting of scam activity.
For the avoidance of doubt – scams should be reported to Action Fraud. Whether you are a victim of a scam or you suspect one. Industry can submit information reports about scam activity. This information enables the building of a bigger and more complete intelligence picture and is the right thing to do.
Scammers are smart and adaptable, they are highly alert, and they evolve their tactics according to changes in the economic, political and social landscape. To have any hope of combatting them we need a comprehensive picture of the scale and nature of the problem.
So please – if you come across scam behaviours in your daily work – report it. Every report made to Action Fraud helps the Police get closer to those committing these crimes. In some cases, it means the Police can disrupt criminal activity very quickly, for example by shutting down fraudulent websites and blocking telephone numbers.
The pandemic has brought more challenges – it’s brought economic uncertainty and fear. Hundreds of thousands of people have lost their jobs and many more are under severe financial pressure.
At difficult times like this, people are more vulnerable. Indeed, Action Fraud reported an increase of almost 45% lost to pension scams in the first three months of 2021 when compared to the same period in 2020.
So, we all need to be on high alert.
Last year the Pension Scams Industry Group (PSIG) produced a code of good practice for schemes, providers and administrators to help with their processes.
To build on that good work, the Pensions Regulator launched the Scams Pledge to encourage companies to adopt the principles of the PSIG Code of Good Practice.
If you work in the industry and have not yet signed the pledge, I strongly urge you to take a look at our Pledge to Combat Pension Scams page on our website and sign up.
These are difficult times. Savers are vulnerable. We in the pensions industry have a duty to do all we can to protect them from unscrupulous scammers. Let’s work together and stamp out pension scams.