0345 300 6256 To arrange a free, no obligation meeting
Navigation Search
0345 300 6256
To arrange a free, no obligation meeting

Helping employees spot pension scams

28 September 2017

When our government finally gets around to announcing imminent action against a problem then that problem is almost certainly causing significant damage.

This is definitely the case with pension scams, which have escalated notably in volume since the introduction of the new pension freedoms in April 2015.

Pension scammers have, according to the government, obtained almost £5 million during the first five months of 2017, and it is estimated that £43 million has been unlawfully obtained by them since April 2014 – with those targeted having lost an average of nearly £15,000.

So the governmental announcement this August that pensions cold-calling – including emails and text messages – will become the subject of a ban enforced by the Information Commissioner’s Office (ICO) could not come soon enough.

But, whilst such intervention from on high is very welcome and has given the matter a greater profile, no implementation date has yet been set. Furthermore, even when the ban does come into force, it will only apply in the UK. A lot of the scammers are based outside the UK, so there is little anyone can do to curb their activities.

Stark warnings about pension scamming issued by The Pensions Regulator have had little impact, so it is important that employers play their part in ensuring that their pension scheme members are able to identify and avoid potential problems.

Many larger firms are already engaging in such an educational process and it is also very much in the interests of smaller firms to follow suit. 

After all, employees who lose money because they are scammed out of a company pension scheme may have to work for longer than originally intended, and this can play havoc with a firm’s succession planning.

Additionally, employers who both exercise a duty of care towards their employees and go the extra mile to look after their interests should benefit from increased loyalty, with a resulting positive impact on productivity and recruitment and retention.

Chase de Vere can deliver educational seminars for employers to help employees to spot the pension scammers. These can either be arranged specifically for the purpose or as part of a more general financial education package.

A key message imparted in such seminars is that if anyone gets a call about pensions from a firm other than one they have expressly requested information from or where an existing client relationship exists then the caller is likely to be up to no good.

Any respectable adviser is most unlikely to cold call, and will in due course be banned from doing so about pensions under the new rules.

Seminar attendees will be taught that scammers who make unsolicited phone calls, texts or emails about pensions will often claim they are from Pension Wise or other government-backed bodies. But such organisations would never make contact in this way to offer a pensions review.

Similarly, scammers sometimes pose as financial advisers, so employees should check that they are registered on the Financial Conduct Authority (FCA) website and that they are authorised to give advice on pensions.

The dangers of being offered unregulated investments with supposedly guaranteed returns will also be stressed. These include exotic sounding assets like vineyards, hotels or other overseas ventures and offers which would involve all of an individual’s money being in one place – and therefore more at risk.

Other key messages that will be highlighted are that people often fall for scams because they’ve been recommended by a friend, and therefore develop a false sense of confidence, and that scammers can try and rush victims into decisions by pressuring them with supposedly time-limited offers or by sending a courier to their door to wait while they sign documents.      

Any employee who has already signed something that they have subsequently become unsure of will also be encouraged to contact their pension provider straight away as it may be possible to prevent a transfer that hasn't yet been completed.  

If you would like to learn more about how Chase de Vere can arrange a suitable educational program to help your employees cope with the risks currently being posed by pension scammers then please do not hesitate to contact Chase de Vere on 0345 300 6256 or complete this simple form and we’ll call you.