The Pensions Regulator has recently warned that there has been a rise in impersonation fraud.
The Pensions Regulator
The Pensions Regulator’s (TPR) analysis of reports to Action Fraud discovered that fraudsters are hacking pension users’ emails to access their correspondence with their pension provider. The fraudsters then impersonate the member by contacting their pension scheme and attempting to change the details of the beneficiary bank account.
TPR also found that some fraudsters used stolen information to set up fake pension accounts in victims’ names, to transfer and steal their pension funds. More than half of the reported victims were aged 50-69. As such, TPR have urged trustees and administrators to strengthen their scheme defences, and to ensure that their members secure their accounts.
TTP also advised that the Financial Conduct Authority, the Fraud Compensation Fund, and the Chartered Trading Standards Institute have recently warned consumers that fraudsters are impersonating them in an attempt to steal personal data and money from consumers.
Action Fraud
Action Fraud found that in 2024, over £17.5 million was lost to pension fraud, with a total of 519 reports, and an average loss of an enormous £33,848 per person. Two of the main ways that fraudsters targeted their victims were through investment fraud pressuring tactics, and account takeovers by impersonating their victims.
“Feeling pressured into an investment opportunity on the spot is a sign of fraud – legitimate organisations will never make you feel this way. Approach any investing offer with caution and seek independent financial advice if you’re unsure.
“Avoid unsolicited phone calls about pensions, it could be a criminal trying to gather personal information to impersonate you and gain access to your pension scheme account, inevitably stealing your hard-earned cash. You can protect your accounts by choosing a strong, secure password and setting up the 2-step verification option.”– Chief Superintendent Amanda Wolf, Head of Action Fraud and the National Fraud Intelligence Bureau (NFIB)
Pension Scams: Warning Signs
- Getting you to click on links or download software or apps– scammers may do this to gain remote access to your devices in order to access things like your bank details
- Pressuring you to make quick decisions- take a step back and question why you are being rushed. Don’t let anyone pressure you to make a quick decision about money you have spent years saving away
- Cold calling– since January 2019, there has been a ban on cold calling about pensions. Unless you’ve asked a company to contact you about your pension, they are not allowed to
- Offering complicated investment schemes where it is unclear where your money will end up
- Claiming to know ways of avoiding tax or saving on tax
- Promising limited time offers or one-off investments– if it sounds too good to be true, it probably is
- Offering a loan or cash back from your pension
- Free pension reviews– professional financial advice does not come for free. If you come across this kind of offer, check the Financial Conduct Authority’s register to confirm that the firm or individual in question is authorised
- Claiming to help you access your pension before age 55– you cannot do this without incurring a high tax bill from HMRC
- Suggesting you funnel all of your pension pot into a singular high-risk investment– the investments most scammers persuade you to buy into are incredibly high-risk, meaning you risk losing all of your retirement savings. Most regulated financial advisers will suggest diversifying your investments to reduce risk