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Pension fraud on the rise – how to avoid scams

Will Donnelly, Co-Founder and Care Expert - Lottie

New research released by the ONS has found a substantial increase in fraud and computer scams over the last two years, especially for ‘advance fee fraud’ – where victims are promised a significant share of a large sum of money, in return for a small up-front payment.

Fraud offences increased by 25% (to 4.5 million offences), with most scams being cyber related. Computer misuse increased by 89%, driven by a large increase in unauthorised access to personal information.

Lottie – a later living marketplace – has also found a recent rise in online scams targeting the over 55’s. Over the last 12 months, online searches for those looking for support after falling victim to pension and investment scams has surged:

  • 133% increase in online searches on Google for ‘can someone steal your pension?’
  • 50% increase in online searches on Google for ‘investment scam’ and 23% increase for ‘pension fraud’
  • 40% increase in online searches on Google for ‘reporting pension fraud’
  • 33% increase in online searches on Google for ‘computer fraud’ and ‘state pension scams’

As a business owner or HR lead, it’s important to protect your team against fraud by raising awareness of suspicious behaviour, the signs of scams and what to do if you fall victim. You must encourage your team to open up if they fall for a scam – as it can be a huge relief. Your business should openly support any employees who have been scammed; whether that’s through practical, emotional or wellbeing support.

Here’s Why Pension Scams Are on The Rise:
“It isn’t surprising to see an increase reported by the ONS for people falling victim to scams – especially during the pandemic. Our online habits changed, with many people purchasing products and services online. Unfortunately, this made us more susceptible to fraud, with scams becoming even more sophisticated.

Over the last 12 months, Lottie’s new research has shown this trend has unfortunately continued, with a huge spike in people seeking support after falling for a scam, coinciding with the rising cost of living. This will place enormous stress on the UK’s workforce, risking isolation, poor mental health, and stress-released health issues.

Anyone can fall victim to a fraud, and it isn’t anything to be ashamed of. Scammers will often try to persuade you to remove some or all money from your pension fund. They may ask you to invest in unusual, high-risk investments, including overseas property. Or they may contact you out-of-the-blue for a free pension review, promising advances on your pension pot.

Thankfully, there are ways to reduce your risk of falling victim to fraud and we must raise awareness about staying savvy to scams – as well as sharing the best ways to report anything suspicious.”

Five Simple Tricks to Share With Your Team To Lower Your Risk of Pension Fraud:
Frauds are becoming even more sophisticated, so it is important to stay clued up on the warning signs of pension and investment scams. They can lead you to losing a lifetime’s worth of savings in one moment, so you must stay cautious. You should share these with your team to encourage them to stay alert to scams.

  1. Watch out for warning signs

Scammers will often contact you unexpectedly, whether that is via a phone call, text message or email. Remember – since January 2019, there has been a ban on cold-calling about pensions. So, if you do get contacted and offered a free pension review or investment opportunity, it is likely that it is a scam.

Simply hang up or ignore any unsolicited text messages promising you more money.

  1. Seek financial guidance first

If you are keen to review your pension, there are ways to receive free, impartial advice, including Money Helper’s Pension Wise service. Before changing any of your pension arrangements, seek out impartial financial advice from a reputable source, first.

Take the time to check any investment opportunities before transferring over any money. Make sure that whoever you are dealing with is regulated by the Financial Conduct Authority (FCA) and they are authorised to provide you with financial advice.

  1. Keep up to date with the latest scams

It is no surprise that fraudsters are becoming even more sophisticated. An important part of reducing your risk of falling victim to fraud is staying clued up on the latest scams. Age UK provide information on the latest scams – including fake Ukraine fundraisers and fake energy refund emails.

  1. Speak to your loved ones

If you have fallen victim to fraud, do not suffer in silence. Anyone can be susceptible to scams, especially as they are becoming more sophisticated. Even the most careful people can be caught out.

Make sure you speak to your friends and family, as it can feel a huge relief to open up about how you’ve feeling. They can support you in reporting the fraud and help you cope with any stress, anxiety or worry you are experiencing.

  1. Report a scam

Most importantly, do not feel embarrassed about reporting fraud. There are organisations that can support you and you will help them track down the fraudsters. Contact the police via 101 immediately if you feel threatened or if you have transferred money to the scammer in the last 24 hours.

You can also report fraud to the Citizens Advice service – make sure you note down all details about the scam, including whether you have transferred any money, who you have been in contact with and the type of information you have shared.

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