The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have launched a joint advertising campaign to raise awareness of pension scams, as it was reported victims lost an average of £91,000 each last year.
The ScamSmart campaign will target pension holders aged 45-65, the group identified by the regulators most at risk of pension scams, and will feature television adverts highlighting the most common tactics adopted by fraudsters.
In a poll commissioned by the regulators, 32 per cent of pension holders aged 45-65 were found to be unsure how to verify whether they are speaking with a legitimate pensions adviser or provider.
The FCA and TPR identified cold calling as the most common method used by pension scammers and warned the offer of a 'free pension review' was a common tactic used by fraudsters that many pension holders were unaware of - the regulators reported one in eight 45-65-year-olds surveyed said they would trust an offer of a 'free pension review'.
Other tactics included unexpected contact via post or email, promises of high returns and downplaying the risks, offers of unusual overseas investments and promising to unlock money from an individual’s pension early.
The government is in the process of banning cold-calling on pensions but in July it admitted it had failed to meet its initial June deadline - stating the "complexity" of the issue as reason for the delay. It then launched a consultation on the matter.
City of London Police figures out in July showed losses from investment fraud had risen by 70 per cent in the first quarter of this year when compared with the previous year.
The sum taken from investors between April and June 2018 jumped from the £30m reported last year, and amounted to more than double the £24m reported for the same period in 2016.
Mark Steward, executive director of enforcement and market oversight at the FCA, said the size of individual pension pots made pension savings an attractive target for fraudsters and urged anyone who is thinking about transferring their pension to only use firms authorised by the FCA.
He said: "Pension scams can cause victims significant harm – both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website."
Nicola Parish, executive director of frontline regulation at TPR, said a pension cold call was most likely an attempt to steal someone's savings.
She said: "Our message is clear – hang up and report it."
The campaign encourages anyone who believes they may have been targeted by fraudsters to report the experience, with the FCA and TPR believing the minority of pension scams go unreported.
The FCA and TPR’s partnership is part of a wider multi-agency task force, Project Bloom, working to combat pension scams - with members including the Department for Work and Pensions, HM Treasury and the City of London Police.