Regulation  

Pension scams a priority for regulator in 2016

Pension scams a priority for regulator in 2016

The FCA has confirmed its intention to reduce and prevent the harm caused by pension scams and highlight the dangers of investing in unauthorised schemes.

In 2015, the watchdog launched ‘Scamsmart’, a campaign aimed at preventing crime on those at or approaching retirement. The flexibility provided by the pension freedoms, although welcomed by consumers, has given fresh impetus to scammers looking to operate in this area. A new phase of Scamsmart will be run in 2016/17, including an interactive tool called the ‘Warning List’ to help people avoid potential scams.

When asked whether the public are sufficiently aware of those scams, Christopher Foster, partner at Lancashire-based Pennines Independent Financial Advisers, said “Not at all. I have dealt with a cross-section of the public that have been targeted – from a self-employed plumber to a mortgage adviser manager for a large bank. In each case they have been taken in by a combination of plausible literature and sales pitch and the promise of large, but not unbelievable returns.”

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A recent report from Citizens Advice revealed a discrepancy between people’s confidence in spotting a scam and their ability to do so. Of those surveyed, 76 per cent were confident they could identify a pension scam but only 12 per cent were able to, when presented with one.

Worryingly, 10.9m customers have received unsolicited contact about their pension in the last year. Perhaps of greater concern, 64 per cent said they would consider an unsolicited offer and only a third would check the company is listed on the FCAs online register.

Mr Foster, said the financial and emotional distress is severe. “Just this year alone I have uncovered three scams that have taken millions from consumers. The FSCS will pick up some of the bill, but the overall harm is incalculable in terms of lost confidence and real hard earned savings that are lost too,” he added.