Summary: Pensions are a growing target for fraudsters. With scams becoming increasingly sophisticated, we’re always trying to find new ways to stay ahead.

Earlier this year, the former Newsnight presenter Emily Maitlis revealed on Twitter how close she’d come to being tricked by a scammer into giving out her bank details.

The phone call – from someone claiming to be from the fraud detection squad – seemed convincing and plausible (even down to using the phrase “this call will be recorded for training purposes.”) Only a call to the real agency confirmed it was all a con.

Fraud costs the UK up to £190 billion a year and scams like these are becoming increasingly common.

Pensions are a particular target. According to the FCA, in the first half of last year alone scammers conned victims out of more than £2 million from their pensions. The Pension Scams Industry Group (PSIG) estimates that, since 2015, 40,000 people have lost around £10 billion between them to fraudsters.

Spotting a scammer is getting harder

Sometimes the fact it’s a scam stands out; it could be a dodgy looking email with a tell-tale spelling error. But they’re becoming harder to spot. Scammers are increasingly sophisticated.

And the depressing fact is that once taken in by a pensions scam, it’s often incredibly hard to get your money back. Unlike something like travel insurance, where it’s relatively straightforward to claim compensation for missing luggage or a cancelled flight (something that a lot of holidaymakers have had experience of recently), if you’ve fallen for a scam, there’s sometimes very little that can be done after the fact.

The warning signs

Here are some of the major red flags to be aware of to try and stay ahead of the scammers:

Scammers will often use high-pressure sales tactics (such as saying an offer is only available for a certain time). The opportunities are also likely to be higher risk, unregulated, and from unusual sources.

They might also try to lure you in with offers of a ‘free pension review’ or promising to help you release your pension before you turn 55.

Now, taken on their own these aren’t necessarily scams (for example, at AAB Wealth, we offer our prospective clients an initial consultation for free). However, tempting deals should be a reminder to check what you’re getting involved in.

You should always take advice from someone you trust. That means a recognised company, one that’s regulated by the FCA.

A good place to start if you’re unsure is the FCA’s new ScamSmart website which gives advice on avoiding investment and pension scams, helps you check the FCA’s warning list and report scams and unauthorised firms.

Even if you trust the firm, you still need to take care

Taking you in with a tempting deal isn’t the only route scammers use. Another common tactic is attempting to intercept client money. For example, fraudsters might try to amend your bank details, or capture identification info during transactions.

How they do this can include impersonating a reputable firm, or like the Emily Maitlis example, finding other means to intercept your personal details, even pretending that they represent authorities trying to stop fraud.

At AAB Wealth, we want clients to know they’re protected. We’ve got several processes in place to ensure your data – and your money – remain safe.

These include:

• A secure online portal. We use this for all messaging and transferring your documents and information securely.
• Robust operational processes that have stood the test of time. We have a strong focus on internal IT security keeping your data safe from cyber security threats and potential data breaches.
• A bank account verification process that ensures money cannot leave portfolios to anywhere except the client’s account.
• Reputable and secure investment platforms to hold client money
• Internal and external compliance resources to scrutinise and monitor processes
• We only use regulated investments for clients – we won’t come to you with opportunities involving high-risk, unusual investments.

And importantly, even though we take pride in being a tech-enabled firm, we are always here to meet our clients in person. There is always a door to bang in the unlikely event that something goes wrong!

Beware the wolf in sheep’s clothing

Above all, it’s important to keep vigilant.

Think of a scammer like a wolf in sheep’s clothing – trying to tempt you in with a good-looking deal. It’s always a good idea to double check – even pausing before giving any important information. You can even put the phone down to verify any details independently and call back later. Remember, a trustworthy firm won’t mind if you want to get your facts straight first.

The checklist

Whenever you see an offer that could affect your pension, it’s a good idea to ask yourself these questions:

• Is the email or approach unexpected? You should be wary if something comes out of the blue, it could come from a firm that’s unauthorised or unregulated.
• Do you trust the firm who’s approached you? If in any doubt, check the FCA’s warning list.
• Have you been asked to download something new – or are you being directed away from your usual banking or investment platform? Beware of accidentally clicking a fraudulent link.
• Are you under pressure to invest or make a decision? Is the offer time limited, or are the sales tactics heavy handed or even threatening?
• Does the offer sound too good to be true? Or is it downplaying the level of risk involved?