Scammers are relentlessly contacting the over 55s with cold calls, texts and emails to lure them into pension frauds, according to a new survey.
Consumer watchdogs Citizens Advice says research suggests 40% of over 55s are regularly targeted by crooks posing as bogus pension advisers.
Around 10% of those contacted fell for the sting and lost money.
The main focus of the scammers involves offers to transfer pension tax-free lump sums into unrealistic high risk investment opportunities.
Fraudsters typically offer a high return overseas investment that does not exist to tempt retirement savers to switch their cash into the bogus scheme.
The latest scams
Citizens Advice outlined the most frequently reported scams:
- Crooks posing as pension advisers request access to the victim’s retirement savings to reinvest them but fail to explain what the investments are and how they work
- Retirement savers agree to take part in a free pension review and are often visited at home by the fraudsters who use the chance to gather personal information that will give them access to the victim’s pension and other financial accounts
- High risk investments with reported high returns are offered in return for pension cash, such as fine wine, overseas property. These scams often involve a team of at least two fraudsters. One gathers information while the other pushes switching cash out of the pension. Often these involve investments in South Africa.
Citizens Advice chief executive Gillian Guy said: “These fraudsters are deliberately targeting the over 55s time and again with offers of false investment opportunities.
“Taking up these offers will result in the money disappearing and will undermine the victim’s chances of having enough cash for a comfortable retirement.”
Fraudsters step up campaigns
She also confirmed that the watchdog is seeing increased attempts to steal retirement savings since pension freedoms were introduced in April 2015.
“In the past few months, more cases have been reported and the fraudsters are changing tack to take advantage of people who trust them with large sums of money,” she said.
The research also found:
- 80% of fraud targets were contacted by an uninvited phone call
- Another third were contacted by email
- Another third were contacted by post
- 20% received cold-call text messages
“If you are contacted by a scammer the two giveaways are they are seemingly offering free advice and some sort of high return investment which is not generally available through a reputable company,” said Guy.
She added that independent financial advisers charge for consultations and that regulators insist high risk opportunities are only offered to ‘sophisticated investors’ who understand the consequences of losing their money.
