One in six retirees fall victim to scams

The Financial Services Compensation Scheme has carried out research that suggests that 17.5% (more than one in six) retirees aged between 55 and 75 have been the victim of a scam.

Of those that have been scammed, the?principal reasons they gave for entering into the scam were:

• The fraudster's promotional material looked genuine (mentioned by 28% of those scammed)
• The prospect of higher returns mentioned in the scam promotions was just too tempting (19%)
• The scammer sounded trustworthy?(18%)

Amongst respondents who had not fallen victim to a scam, as many as 63% said they were concerned about becoming a victim in the future.?

Of those expressing this concern, 76% said they had read about?scams in the media and 24% said they knew someone who had been a victim.

The FSCS highlights that the Financial Conduct Authority issued 1,204 scam warnings in 2020, around double the total for the previous year.

The Service also says it is alerted "several times a week on average" to cases where organisations either impersonate FSCS, or claim that their products and services are protected by the FSCS when this is not the case.

Caroline Rainbird, FSCS's CEO, said:?

"Scams are becoming more commonplace, better coordinated and harder to spot.

“We are helping to tackle scams where we can, for example by monitoring and reporting scams to the financial regulator, the FCA, but given the scale of the issue, consumers need to act as the first line of defence.

“By remaining vigilant and asking themselves, is the provider genuine, and is the person they’re speaking to who they say they are, consumers will be able to better protect themselves from this growing threat.”

The latest data from the Financial Ombudsman Service show a dramatic increase in the numbers of complaints relating to scams and frauds. The?FOS received 5,025 complaints about these issues during the first quarter of the 2021/22 financial year (April 1 to June 30 2021), which represents a 66% increase when compared to Q1 2020/21.

The uphold rate for the scams and fraud cases closed by FOS has also risen from 50% in Q1 2020/21 to 60% in the latest three-month period.

The FOS has highlighted two particular types of fraud complaint:

• Consumers?saying?that they were contacted by someone claiming to be from their bank, who told them to transfer their money to another account for supposed security reasons
• Consumers who paid for goods via bank transfer, but who then never received anything in return, or received poor quality good