What is it like to be scammed?
Pension scams have been flourishing long before the coronavirus pandemic but with the latest disruption it is feared even more people could be preyed upon as their incomes dwindle and their investments crash.
The regulators have already issued a warning to consumers to protect themselves from unscrupulous scammers trying to exploit the uncertainty created by the current situation.
Just this week, the FCA said it was concerned about the harm caused by fraudulent and high-risk illiquid investments and this year it will launch an awareness campaign to be run over five years, to highlight the dangers, costing £2.3m.
Yet there is evidence the regulator’s messages have not always got through to consumers.
Caveat emptor is a dangerous approach to take when tackling scams and one that so far has led to a lot of hardship and a huge cost to the industry.
In 2018 victims of pension fraud reported they had lost an average of £82,000 each.
This year advisers have had to fork out £213m to fund the fallout and FSCS bills are still rising.
In its fees paper out this week the regulator admitted that consumers are not always aware of which activities the FCA regulates and do not fully understand the protections in place (FSCS and Fos).
Something groundbreaking needs to happen to make this space work for industry and consumers alike.
This investigation, a months' long look at the real consequences of the actions of scammers and rogue operators, sets out the challenges.
All text and photos by Carmen Reichman, news editor of Financial Adviser and FTAdviser
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