If you are a retirement saver switching pension funds, you have a 1 in 12 chance of falling victim to a scam.
Although the odds of a fraudster grabbing your cash have fallen slightly from 1 in 9 compared with two years ago, the risk is still frighteningly high.
The figures come from a detailed analysis of thousands of pension transfers by financial consultancy Xafinity.
The firm audits pension transactions for a panel of well-known providers.
The most frequent potential scam flag was the involvement of an unregulated or unauthorised adviser in the proposed transfer chain.
Cold-call ban unlikely to work
This alert trigger turned up in almost a third of scam cases.
From the results of the survey, the firm doubts that the pension cold-calling ban proposed by the government will have much of an effect on fraudsters.
Only a fifth of scams originated from a cold-call and the ban is likely only to displace fraudsters into trying to persuade retirement savers to give them their money by other means.
Jackie Warwick, head of Xafinity’s pension scam identification unit, said: “In many cases when we speak to the member it transpires that they have had no contact with the IFA who has signed off the discharge to the trustees.
“When a member realises that they have effectively been ‘advised’ by someone they have never spoken to they often decide for themselves that something is wrong and therefore choose not to proceed with the transfer.
Tell-tale signs of a scam detected
“Members often tell us how appreciative they are of the steps being taken by the trustees to protect them and their fellow scheme members from the threat of pension scams.”
The firm says a two-step scam detection process is paying dividends for retirement savers and pension schemes.
Actuary Ben Fisher said: “Our scam identification telephone service continues to identify tell-tale signs of scam activity that would be almost impossible to pick-up just from completed paper transfer forms alone. The perpetrators of pension scams will often step-in to complete the paperwork themselves to ensure it doesn’t contain any indication of a scam.
“Our telephone service can be easily integrated within a scheme’s existing processes regardless of who provides administration, be it in-house or third-party, and provides another layer of defence against scammers.”