Pension scams are sadly becoming more common, and Britons have been warned to look out for the warning signs. Many fraudsters are promising high returns to those who may have been saving for decades towards their retirement. One wrong move, and people could see their fund for later years obliterated entirely.
He said: “The wall of protection should look like a carefully and intelligently assembled defensive wall – let’s think of Dover Castle, for example. But instead it looks like an old, mostly destroyed, casually assembled wall.
“When I imagine the defensive wall around the British public protecting them from scammers, I see a wall that is so easy to get across, it may as well not be there.
“It is actually worse than no defences at all because if there were no defences, then we would all be clamouring for change. There is a perception of a protective ring helping the British public, but that, in my opinion, is so flawed, it is worse than having nothing at all.”
Various witnesses to the committee encouraged further action and investigation to be taken into pension scamming to protect savers.
Mr Aganthangelou added: “We should be doing all we can to harness the power of the British legal and regulatory system to protect our citizens by using our own domestic laws as well as maximising collaboration with other countries.
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“We really do need to take a step back and a macro view at what needs to be happening to protect the British public compared to what is actually taking place right now.”
But the issue may be one which is difficult to confront.
This is because, the committee heard, it is often difficult to pin down how many pension scams there are.
There is often a lack of reporting of these issues due to a number of reasons including embarrassment at falling victim, but this does not help the industry gain understanding of the task at hand.
Margaret Snowdon, Chair of the Pension Scams Industry Group, commented on this fact, and provided insight into the data.
She said: “The truth is, no one really knows how many pension scams there are, because the data is often not collected.
“Based on a small survey in 2018, which covered 1.3billion in transfer values, there were 27,000 transfers in that year.
“We found that between 0.5 percent and 12 percent of transfers appear to be scams, so ultimately settled on a figure of five percent.
“While we don’t see scams necessarily going up or down, we do see change present. It isn’t necessarily getting worse, but the problem remains the same.
“We think potentially 40,00 people may have been scammed in one way or another, and up to £10billion might have gone to scams. Some might not even know it yet, as they haven’t reached retirement age.”
However, for those who may be concerned they could fall victim to a pension scam, there is guidance to bear in mind.
The government-backed Pensions Regulator, which also developed a campaign to shed light on the issue, has indicated warning signs of a potential pension scam.
Their website reads: “Scammers often cold call people via phone, email or text – this is illegal and a likely sign of a scam. They often advertise online and can have websites that look official or government-backed.”
However, there are also other common signs for Britons to look out for when managing their pension.
Phrases such as ‘free pension review’, ‘pension liberation’, ‘loophole’ and ‘one-off investment’ have been identified as signs of fraud.
Unusual high risk investments and complicated investment structures may also be areas of suspicion for Britons, and high pressure sales tactics, which can include using couriers to send documents, or time-limited offers can also suggest a scam is at work.
Those who believe they may have fallen victim are encouraged to immediately contact their pension provider, who ma be able to stop the transfer.
They are then urged to reach out to Action Fraud and report the matter to the police.