21% of older workers think they are too savvy to be scammed

In the 55 days before the Financial Conduct Authority and the Pensions Regulator launched their first joint campaign this summer, about 31,000 people visited the ScamSmart website at an average of 562 a day.

It is critical policymakers continue to monitor and adapt their approach to protect savers

Tom Selby, AJ Bell

In the 55 days after the campaign was launched this rose 462 per cent, to more than 173,000 people, with an average of 3,145 a day.

Furthermore, more than 370 pensions holders were warned about an unauthorised company after using the FCA’s Warning List, an online tool that helps individuals check a list of companies operating without authorisation.

However, there is still a lot more to be done when it comes to protecting savers and raising awareness.

A survey carried out by market research company GfK this year found that 52 per cent of 45 to 65-year-olds with a pension do not think they are likely to be targeted by a pension scam.

Twenty-one per cent said the reason was that they are too savvy to be scammed, while 18 per cent said they did not have enough money saved in their pension to be a target.

Scams have become more sophisticated

The ways in which fraudsters target victims has become more and more sophisticated, meaning it can be difficult for a consumer to know when something is a scam.

“We would all like to think we can spot con artists a mile off, but the truth is that scams are becoming increasingly sophisticated and the public’s knowledge of pension rules is often very hazy,” said Stephen Lowe, director at retirement specialist, Just Group.

“Along with the large sums of money at stake, that makes for a situation ripe for exploitation. It is worrying that more than half don’t think they are likely to be targeted, because the scammers feed off lack of knowledge and complacency, fuelled by people’s enthusiasm to get their hands on their money quickly,” he added.

Mike Crowe, trustee representative at Dalriada Trustees, agreed that even those who consider themselves alert to dangers can be fooled: “The cold callers and the techniques that these people employ are very, very sophisticated, they’re very, very, convincing.”

FCA research shows that more than 10m UK adults received an unsolicited pension offer in just one year.

As part of its joint campaign with the Pensions Regulator, it released a television advertisement to warn members of the public about pensions scams.

Get people engaged

Crowe said the number of people who have visited the ScamSmart website since the campaign was launched is encouraging, and praised the approach taken by the ScamSmart ads.

Ian Neale, director at policy specialists Aries Insight, emphasised the importance of public education when it comes to scams.

He said making people aware of scams should encourage savers "to be a little bit ruder than perhaps many of us are inclined to be [when] hanging up on a cold-caller”.

Further publicity about actual pension scam cases would be effective, according to Neale. The ScamSmart advertisement featured a pensioner talking about losing his money after falling victim to a scammer.

“What perhaps we need is some cases where there’s a bit more detail given and, in particular, cases where the scam was a bit more sophisticated – perhaps where somebody who can demonstrate that they are actually fairly savvy themselves,” Neale suggested.

Fraudsters find new methods

The Treasury has laid regulations that will ban pension cold-calling in 2019, but there are concerns about scammers finding new, different ways to target their victims.

Lowe noted that “scammers are very creative, and every week we seem to hear about a new type of scam, or a new twist on an old classic”.

He said: “Technology is a double-edged sword – it delivers instant communications and can speed up processes but that can lure people into a false sense of security about who is sending the communication and encourage hasty decisions, which is exactly what the scammers want.”

Policymakers must adapt

Lowe added that the cold-calling ban will help people understand the dangers of unsolicited communications.

However, Tom Selby, senior analyst at AJ Bell, said: “Banning cold-calling was only ever supposed to be part of the solution, which is why it is so frustrating the policy has taken so long to come to fruition. Scammers are already finding ways round the ban, while some will simply flout it altogether.”

He noted that most scams today focus on investments after retirement, and there are many different avenues, including social media, through which people can be targeted.

“Because this picture is ever-changing, it is critical policymakers continue to monitor and adapt their approach to protect savers,” Selby added.

Moreover, he stressed that calls originating from overseas are particularly difficult to police. “Co-operating between the UK government and overseas jurisdictions is vital to tackling the problem in the long-term.”