Fraudsters looting lifetime savings from pensions with scams grab an average £91,000 from each victim.
Now, financial regulators and the police have launched a campaign to raise awareness about the tactics crooks employ to try to steal the money.
Unexpected contact by telephone, email or social media triggers the scam.
Criminals reach out with millions of texts, emails and phone calls to try and elicit a response from a retirement saver, says Action Fraud, the online police anti-fraud web site.
Typically, the message offers a free pension review or high return, low risk investments.
£23m lost to scammers
But however professional the adviser sounds, the message is just bait designed to hook a potential victim.
Much of the money transferred to the fraudsters disappears to offshore bank accounts or is switched overseas to a high-risk investment, such as building a hotel resort or financing a hardwood plantation that fail to materialise.
Last year, says Action Fraud, 253 scam victims reported £23 million missing to pension scammers – an average of £91,000 each.
But the police and regulators believe only a fraction of scams are reported through embarrassment or because some victims do not find out that their cash has gone for years as they are too young to access the fund.
Mark Steward, director of enforcement at consumer watchdog the Financial Conduct Authority (FCA), said a TV advertising campaign raising awareness of the problem aims to halt the fraudsters.
Cold calling ban
“We can enforce. We can investigate. We can prosecute. We can continue doing all those things, but they are hard, and they take time and they do not give people the money back that they have lost,” he said.
“Prevention is better than cure, so we want to give people some handy tips to be aware of, particularly if they are confronted by fraudsters.”
The government also hopes a new law banning cold-calling that is in the pipeline will close a major route for fraudsters to approach their victims. The ban is expected to become law in April 2019 after draft regulations are put before Parliament later this year, said the Treasury.
“Pension scams can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible-looking websites, testimonials and materials that are hard to distinguish from the real thing,” said an FCA spokesman.
