Pensioners feel the sting as prime targets for scammers
Convincing victims to move their pension pots into fraudulent schemes, pretending to be their employer or pension provider, and offering bogus ‘free’ financial advice, are among the tactics scammers use to target pensioners reveals Citizens Advice.
The national charity’s new evidence report reveals the financial and emotional toll on pensioners who have been conned into giving up some or all their pension pot. It is a study of 150 cases reported to Citizens Advice in the last year.
Citizens Advice has identified five common types of these scams:
1. Moving savings into a new ‘pension’
Scammers charge pensioners high fees for moving their pension but nothing happens; the money is moved without their permission; or the pensioner agrees the move then the money goes missing or is transferred to fraudulent schemes.
2. Fake investment opportunities
People are told by scammers they can get more out of their savings by investing in in pricey goods, like wine, or ‘revolutionary’ new products or projects.
3. Offering free “advice” and support
Scammers offer ‘free’ pensions advice or a review of the victim’s savings, which can cost money and be useless or may just be a cover for obtaining crucial personal details.
4. Charging a fee for a dodgy service
People are offered services for a fee. In some cases no service is provided at all, whereas in others a service is provided but it is either expensive or not in the consumer’s best interest.
5. Getting personal information from people
Using the phishing or vishing techniques of contacting people by email or over the phone, scammers get victims to give over personal data, like their National Insurance number and bank account. Sometimes the con will use information such as the person’s employer or pension provider.
The report finds people aged 65 and over are more than twice as likely to come to Citizens Advice with a fraud or scam issue. With two thirds of reported scams coming from cold calls, Citizens Advice is calling on people to tell people about suspicious phone calls and report them to authorities.
Gillian Guy, chief executive of Citizens Advice, said:
“Scammers see pensioners as a prime target. There are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots.
“Anyone who feels unsure about a cold call or dodgy offer they have received about their pension should let someone else know, and report it to the authorities. People can get help and support from Citizens Advice if they are worried they have been targeted by scammers.
“Pension Wise guidance will help people get to grips with their pension options and equip them with the knowledge of what to look out for to help them avoid falling victim to scams. Regulators and the authorities must work together to quickly identify scams and stop pension scammers from going on to do more harm.”
Citizens Advice Bureaux helped with over 5,000 scam or fraud problems from April 2014 to March 2015, of which nearly a third were reported by people aged 65 and over.
Almost 200,000 people sought Citizens Advice’s help online with pensions issues and local Citizens Advice Bureaux helped people face to face with 93,000 pension issues in this period.
Pensioners targeted by scams
One man put his £85,000 funds into a retirement benefit scheme promising 3 per cent on his investment after he received a call about moving his frozen pensions. He was even received £1000 for the transaction, but he started to worry about his money when despite being promised a letter every year he didn’t receive any documents.
One 79 year old was called about an ‘opportunity’ to invest in wines, leading him to withdraw all of his savings - worth over £7,000 – for this. Later the company sent him a letter requesting a further £5,500, stating that if he did not invest extra he might lose the money he had already invested.
One woman sought Citizens Advice’s help after she received a call claiming to help check she was receiving all of the pensions she was entitled to. Having provided some details to help with this ‘free’ process, she later discovered that an attempt had been made to withdraw money from her pension fund.
A 48-year-old man was told that he could release 30 per cent of his frozen rate pension early. The company said it could transfer the money to another firm in Hong Kong, which would reduce the tax burden on the client. The client agreed to transfer the pot in return for releasing £12,000 from their pension.
One woman received a letter that seemed to be from her former employer. It asked she confirm she was the person named on the pension and to send details such as date of birth and National Insurance number. She was confused because she was receiving her occupational pension and knew the real provider already had the information.
- Tell someone else about a possible scam, an unsolicited phone call or text, or offer of money
- Never give out your bank details or send money unless you are certain you can trust the person who has asked you to this
- Don’t feel pressured to make a decision straight away, instead take your time
- Seek advice – you can call the Citizens Advice consumer service on 03454 04 05 06
- Report a potential scam to Citizens Advice or to Action Fraud on 0300 123 2040
How to get help from Pension Wise:
People approaching retirement with a defined contribution pension pot will be able to get help from Pension Wise:
- online by visiting the Government’s Pension Wise website
- by telephone by calling 030 0330 1001
- by contacting any Citizens Advice Bureau
Appointments for face to face guidance can be made via any Citizens Advice Bureau.
Notes to editors:
- The Citizens Advice evidence report: consumer experience of pension and pensioner scams before April 2015, looks at 150 cases of pension scams reported between April 2014 to March 2015.
- Citizens Advice Bureaux helped people with 5752 scam or fraud problems from April 2014 to March 2015, with people aged 65 and over 130 per cent more likely to seek help about a scam.
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
- Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014 service statistics see our quarterly publication Advice trends
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.