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People targeted repeatedly with pension scams, say Citizens Advice

7 August 2015

Over 55s are being repeatedly contacted with cold-calls and emails offering fraudulent pension opportunities, new evidence from Citizens Advice reveals today.

Four months after the pension reforms came into effect, figures from the consumer body find that two in five Citizens Advice pensions staff have seen people targeted repeatedly with pension scams.  A further one in ten saw people who had either responded or fallen prey to a scam.

Half of local Citizens Advice pension workers think that pension scams are evolving into investment scams, targeting the cash lump sums people can release from their pension pots. A further third of staff from across the service think that scams targeting the over 55s have increased.

Emerging scams seen by Citizens Advice include:

  • Unspecified financial products: People are asked by fraudsters to give them access to their pension pots, who would then invest them into financial products on their behalf. Despite offering a high rate of return, scammers were unable to explain what the investments might be.

  • Free pension reviews: People are texted or cold-called with offers of a free pension review. The caller then asks to visit the person in their own home, bringing paperwork that would allow them to get access to their pension details. One man responded to an internet ad for a free pension review, filled in his details, and was visited by someone claiming to be an Independent Financial Adviser who couldn’t describe any investments.

  • Investments for pension cash: People are approached with offers to invest their pension cash into products such as property overseas or fine wines. One investment scam featured two salesmen - one who visited the potential customer to get access to his pension details, and a second to encourage him to invest his pension and any other savings into property in South Africa.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Pension scams threaten people’s financial security.  People are being targeted again and again with bogus investment offers or fraudulent pension opportunities.

“Opportunistic fraudsters are finding new ways to go after people’s pension pots including offering free pension reviews and promising to invest in funds that don't necessarily exist.

“Pension and investment scams are particularly dangerous as they can destroy people’s entire pension pot, leaving them with little or no savings for retirement.  We will be monitoring pension scams closely in order to track how they are evolving, and warn consumers what to look out for. If you’ve had an offer or signed up to a scheme you’re unsure about, contact Citizens Advice for support.”

The full survey of more than 460 local Citizens Advice managers, staff, volunteers and Pension Wise guiders also finds that people are most likely to be contacted by cold call, followed by email. Of those who saw people who had been contacted by scammers:

  • 4 in 5 said people were contacted by phone call

  • 1 in 3 said people were contacted by email

  • 1 in 3 said people were contacted by post

  • 1 in 5 said people were approached by text message.

Previous evidence from the charity found that over 55s were more likely to report a scam to their local Citizens Advice.

The Economic Secretary to the Treasury, Harriett Baldwin, said:

“We are working tirelessly to shut down illegal scams and bring scammers to justice.

“We’ve already made it illegal to imitate Pension Wise, are running scams awareness campaigns and have set up The Financial Conduct Authority which has the power to prosecute scammers.

“If you are in any doubt about how to spot a scammer or want to talk through your retirement options, I urge you to visit the Pension Wise website orbook a free telephone or face to face guidance session.”

Pensions Minister Baroness Ros Altmann said:

“Pensions are precious so don’t fall foul of conmen who want to snatch your money.

“If you receive emails, or junk mail with promises of get-rich-quick schemes, chuck them in the bin.

“And if you get cold-called by someone offering a pension review or help to trace a lost pension, hang up because the chances are it’s a scam.”

If you think you may have been scammed you can contact your local Citizens Advice or the Citizens Advice consumer service on 03454 04 05 06 (for advice in Welsh phone 03454 04 05 05).  

Common signs of a pension scam

  • Pension help for free: an offer of help with your pension, such as free review or help tracing a lost pension

  • High rates of return: any promotion offering you a much higher rate of return than other investors

  • Time pressure: if you are told you must give your details within a short time frame or sign paperwork from a courier

  • Early access: an offer to help you access your pension before the age of 55

How to avoid being scammed

  • Never be rushed into making a decision

  • Check if the company contacting you is regulated by the Financial Conduct Authority (FCA)

  • If you are unsure, contact The Pensions Advisory Service on 0300 123 1047 or contact Citizens Advice on 03454 04 05 06

  • Look at the FCA’s Scamsmart warning list, which gives the names of investment schemes that are known scams. www.fca.org.uk/scamsmart

  • If you have already accepted an offer you think is a scam, report it to Action Fraud

  • For further information on pension scams, visit pensionwise.gov.uk

  • Ends -

Notes to editors

  1. Citizens Advice surveyed 468 staff at local Citizens Advice across England and Wales, including 283 managers, staff and volunteers and 185 Pension Wise staff. The research was carried out in June 2015.

  2. The Citizens Advice service comprises a network of local Citizens Advice, 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.

  3. 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

  4. To find your local Citizens Advice in England and Wales or to get advice online, visit citizensadvice.org.uk.

  5. 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.

  6. Citizens Advice Bureaux in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full 2013/2014 service statistics see our quarterly publication Advice trends.

  7. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.