Could you spot a pension scam?

People want your money. Some people will try anything to get it. 15-28 June is Citizens Advice Scam Awareness Fortnight, highlighting scams and how to avoid them. Would you know if a pension scammer targeted you?

Anyone can be scammed

Don’t assume a scammer wouldn’t bother with you! It’s not just people with lots of money who get targeted by pension scammers. People who are struggling and desperate for money can be easily scammed.

Avoiding pension scams

If you've received an offer about your pension, ask yourself these two questions.

1.    Did you ask for this? No? Treat it with caution.

2.    Does it sound too good to be true? Yes? It probably is.

In other words …

Beware of offers of free help with your pension that come out of the blue - even if they seem to come from a government organisation like the Money and Pensions Service, Pensions Advisory Service or Pension Wise. None of these organisations will contact you unless you ask them first.

Never, ever, click on a link in an email, text or social media message. Doing this can enable scammers to verify your phone number or email address.

Don’t listen to anyone saying you can get money out of your pension before you’re 55. You can only do this in very special cases – such as if you’ve got a protected earlier retirement age (usually through work) or you’re terminally ill. Otherwise, you’ll be hit with a huge tax bill.

Be very wary of offers to transfer your pension out of your current provider – especially if they promise high or guaranteed investment returns (you can’t guarantee investment returns) or want to transfer your pension overseas (which makes money harder to trace).  

And finally - if someone puts pressure on you to decide quickly, or gets impatient or angry if you want to check they’re genuine – steer clear. Genuine organisations won’t mind you checking that they are who they say they are, and won’t try to rush you into anything.

Checking for scams

My husband recently got an information pack from a financial advice firm, offering him a free pension review.

It looked genuine. They offer the review with no obligation, hoping you’ll then pay them to give you financial advice (they actually say this). The documents were clear and easy to understand – even I, a plain language specialist, was impressed – and included testimonials from happy customers saying how good this firm’s service is.

I decided to use the Financial Conduct Authority’s Scamsmart service to check whether this was a scam or not.

https://www.fca.org.uk/scamsmart takes me to the FCA’s Scamsmart website.  

There are drop-down menus where you can choose what kind of information you’ve received.

As this was a free pension review, the FCA thinks it's it’s probably a scam. I can check if the name of the financial advice firm, is on the FCA Warning List, a list of known scams, so I do.

Nope – there are no firms on the warning list matching the name I’ve got. It suggests I search the FCA’s register to see if it’s on that. I click through to the register ...

... which gives me three results from the name I’m looking for.

This is not unusual, as some firms have separate business names for different parts of their business.

I pick the name that matches the one on the correspondence.

I get the firm’s full name and a list of drop-down boxes. It says here that this firm is authorised.

I look under Contact Details to check the address. It matches the address on the correspondence I’ve got.

I look under Basic Details.

It says this firm is regulated.

Then I look under Permission to see if the firm has permission to give advice about pensions.

It does – there’s a list of the types of pension it’s allowed to give advice about.

So this is an authorised and regulated firm that’s allowed to give advice about pensions. The offer probably isn't a scam.

I decide to look for something that might be a scam. Searching for ‘free pension review’ throws up a garish, badly-written website with obvious typos, including pension advisor’s at the top and my consultant new what he was on about in one of the customer testimonials.

This looks likely. I wouldn’t touch this firm with a bargepole just based on their website.

Searching for the firm’s name on the FCA warning list produces nothing. But there’s no sign of the firm on the FCA register either. Definitely one to avoid! (Sadly, the FCA register is not completely foolproof. The way financial firms are regulated is currently changing so not all firms may appear on the register, and some of the details on the register has may be out of date.)

Reporting scams

If you get a pension offer that looks like a scam, report it to the FCA. You can call them on 0800 111 6768 or use the reporting form on the FCA website.

If the offer came by phone, text or social media message, you can also report it to the Information Commissioner's Office. Again, you can do this online or by calling 0303 123 1113.

If you’ve taken up an offer of help with your pension but are now worried it’s a scam, you should do the following things immediately.

• Contact your pension provider. It may not be too late for them to help.
• Report it to Action Fraud, the police fraud website, on 0300 123 2040.

More anti-scam stuff

There’s more about pension scams and how to avoid them on the Pensions Regulator’s website (search for 'pension scams'). 

The Pensions Advisory Service website also has a section about pension scams. You can call them on 0800 011 3797 or use their online webchat. 

Not just pension scams: find out more about Citizens Advice Scam Awareness Fortnight.

Stay safe

I hope this helps you recognise and avoid pension scams and keep your pension savings safe. #LoveYourPension #PensionHowTo