Record high for pension scams

Recorded losses for pension scams climbed to a record high of more than £8 million in March.

City of London police said losses had rocketed up from £779,000 reported by 12 individuals in February to an amazing £8.6 million reported by 24 victims in March.

Scammed
The latest figure forms a sizeable chunk of the estimated £42 million scammed out of pensioners since April 2014 when the new pension freedoms were introduced by Chancellor George Osborne.

Known as pension liberation fraud, the scammers con their victims into placing their pension funds into non-existent ventures, schemes that are illiquid or ones which are incapable of delivering the promised returns.

Additionally, the heartless fraudsters don’t warn their victims of the tax charges for converting their pensions before the age of 55 which can wipe out half the value of their savings.

Petition

Campaigner Darrell Cooke is a financial advisor who launched a petition to get the government to ban cold calling with regard to pensions.  He said: “The rise is shocking and the number of victims and losses is likely to be significantly higher.

“Scam victims are often too embarrassed to admit they have been fooled, or slow to realise they have been taken advantage of so this is likely to be the tip of the iceberg.”

Ramping up

He credited the sharp increase in the number of crimes to scammers ‘ramping up’ their activities following the announcement of a government plan to ban cold calling.

Cold calling is recognised as the most popular way for scammers target their victims who are typically elderly pensioners.

Ban

The government announced their intention of imposing a cold call ban back in November saying it would ‘cut off a key source of pension scams while significantly simplifying the anti-fraud message to the general public.’

The proposal went out for consultation which ended in February, but the snap general election called by Theresa May has put the plan on hold until after the election.

High priority

Pensions expert Tom McPhail said: “The ban on cold-calling should be a high priority for the next government.  The sooner it can be brought in, the better.

“Thieves and fraudsters will continue to target the pension funds of the vulnerable and unwary. Individuals should always be vigilant, but the government has an important role to play too.”

Next government

A spokesmen for the Department for Work and Pensions said it will be for the next government to respond to the consultation and decide what to do.

He added: “Pension freedoms give savers a choice over how they use their hard-earned savings, but it is important that people are aware of the risks of fraud.

“The Pensions Advisory Service and Pension Wise both provide free, impartial guidance to consumers so they can fully understand the options available to them.”