Five-fold rise in savers checking for scams, FCA reveals

Five-fold rise in savers checking for scams, FCA reveals

The number of people seeking information about pension scams rose five-fold since the launch of a joint campaign by the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).

In the 55 days before the launch, around 31,000 people visited the ScamSmart website at an average of 562 a day.

But in the 55 days after the launch this figure rose by 462 per cent to more than 173,000 people – an average of 3,145 a day and the equivalent of one every 27 seconds, the regulators said.

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Additionally, more than 370 pensions holders were warned about an unauthorised firm after using the warning list, an online tool that helps consumers check a list of firms operating without authorisation.

Launched in August, the ScamSmart campaign targets pension holders aged 45 to 65, the group identified by the regulators most at risk of pension scams, and features television adverts highlighting the most common tactics adopted by fraudsters.

Victims of pension scams last year lost an average of £91,000 each to fraudsters. They reported receiving cold-calls, offers of free pension reviews and promises that they would get high rates of return – all of which are key warning signs of scams.

Mark Steward, the FCA’s executive director of enforcement and market oversight, said the regulator’s research showed many pension holders believed they were too savvy to be scammed.

He said: "But pension scams are often very sophisticated and difficult to spot. Scammers will target people from all walks of life and with any size pension.

"The best way to protect yourself is to always check the FCA register to make sure that anyone offering you pension advice or any other financial service is authorised by the FCA."

Nicola Parish, TPR’s executive director of frontline regulation, said the "dramatic" increase in the number of people visiting ScamSmart for information was very encouraging but this was not the end of the campaign.

She said: "Every pension holder is a potential scam victim so it’s vital that we continue spreading the word about scammers and how they operate to prevent more people handing over their funds to criminals."

Guy Opperman, minister for pensions and financial inclusion, argued the response to this campaign was encouraging, as "raising awareness of how these heartless criminals operate" was key to tackling fraud.

The government is in the process of introducing a ban on cold calling this autumn after HM Treasury confirmed draft regulations on the ban will be published and prohibition itself will come into force 21 days after the day on which they are made.

Tom Selby, senior analyst at AJ Bell, said the regulators deserved credit for finally taking the bull by the horns on pension fraud.

He added: "By launching a dedicated campaign warning about the dangers of scams – including a highly effective television advert – the regulators have already helped boost awareness among consumers. 

"Alongside the forthcoming ban on pensions cold-calling, an ongoing commitment to communicating the dangers of scams to the public should help ensure more savers are confident enough to reject the overtures of the snake-oil salesmen flogging these dodgy schemes."