Pension watchdogs have kicked off a new campaign to help retirement savers spot scammers after their cash.
Figures from the City of London Police revealed that £13.2 million was lost to pension liberation scams in the year to February 2016 – up 26% on the year before.
Regulator the Pension Advisory Service (Tpas) fears millions more has been stolen but victims are either too embarrassed to come forward or have not realised the cash has gone because they do not monitor their pension pots.
Tpas has devised an online scam detector that steps through why someone may offer pension advice and whether the information is likely to be from a fraudster.
The watchdog explains that raising awareness about pension scams is vital as once money has been paid into a pension liberation scheme, the likelihood of any being returned is slim.
“We are seeing positive signs that consumers are now more aware of pension scams, which is great news, but we must continue to offer consumers opportunities to learn about scams; how they work, the consequences and understand how they can best protect their pension savings,” said Tpas CEO Michelle Cracknell.
“The tool we have launched will go a way to helping those who may initially be too embarrassed or worried to ask for help.
“It will allow them to self-serve and be given next steps depending on their position, which includes talking to us. We want to give savers every opportunity to disrupt a potential scam and protect their pension from unscrupulous scammers.”
How fraudsters lure investors
Scammers typically offer the under 55s early access to their pension cash, which is against tax rules, or exotic investments promising sky high returns that fail to materialise.
These investments include hotel resorts, land investments, fine wines and carbon credits – all which sound too good to be true because of the yields.
“Scammers are after your pension pot. They know you can now access your savings in new ways and will try to lure you with promises of upfront cash and one-off ‘deals’ with guaranteed high returns,” says the Pensions Regulator.
“Learn how to spot the signs and give yourself the best possible protection against pension predators by following our 10-step guide.”