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Warning: ‘free pension review’ scam abounds

Warning: ‘free pension review’ scam abounds

Category: Pensions
Author: Lieke Braadbaart
Date: 07/09/2018

Until the Government introduces the much-anticipated pensions cold-calling ban, the problem still seems to be widespread, with the latest research from Aegon suggesting that 91% of people have received cold calls in the past.

Unlike the name suggests, these unsolicited advances don't always happen over the phone, with 59% of survey respondents getting approached via email and 53% receiving an unwelcome text. With so many communication methods at their disposal, it's no wonder fraudsters are flourishing.

While not every single call, text or email will be a scam, it's important to be vigilant when getting contacted out of the blue. Even a company that has a seemingly legitimate website may turn out to be a fraudulent operation looking to steal your money, with the offer of a free pension review a common method used by scammers to swindle unsuspecting savers.

Indeed, the survey found that 28% were offered such a review over the past three years. "The offer of a free pension review can sound harmless, but it's a method commonly used by scammers to trick people into giving personal and financial information," warned Kate Smith of Aegon. "The mention of those three little words should immediately have alarm bells ringing. Unfortunately, many people are taken in and persuaded to share information with fraudsters, which in many cases results in them losing all their pension savings."

Due to the disastrous effects these cold calls can have, many consumers (53%) are worried about the Government's delay in banning cold calls, with 69% believing a delay could leave them or their family members unprotected. "With nine out of 10 people affected by the scourge of cold callers, the Government's cold-calling ban, which will also cover text messages and emails, can't come quickly enough," said Kate.

She continued: "The intention to ban pension cold calling was first mentioned over two years ago, [and] every month that passes means more people's pensions are at risk from scammers, intent on separating people from their lifetime savings. A major new awareness campaign on the risk of pension scams has been launched by the regulators. What the Government needs to do now is bring in adequate legal protection and ban pension cold calling."

Until that happens, however, it's up to us to be vigilant. If you're not sure, always assume a stranger calling you out of the blue is a fraud, and remind any vulnerable family members not to give away their personal details either. If you're nearing retirement and would like to talk to an expert, you could consider talking to an annuity service. Those over 50 with one or more defined contribution pension pots can also make an appointment with the Government's Pension Wise service, while those who are worried they've been in contact with scammers can contact the Pensions Advisory Service.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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