Unfortunately, fraudsters have taken advantage of the rising confusion to attempt to dupe many unsuspecting Britons out of their hard-earned cash. Pension scams soared by 400 percent last month, according to a recent report from Action Fraud, with numerous people being targeted.
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Recently, the Association of British Insurers (ABI) issued a particular warning to pensioners who may face being scammed out of money they have put aside for later life.
Con-artists have targeted the often vulnerable group in complex scams which could see Britons robbed of thousands.
Many fraudsters have claimed to be pension providers and insurers, contacting people over the phone or through email, and convincing pensioners to hand over money and other personal information.
With the drastic rise in pension scams, new advice has been offered concerning how pensioners can keep themselves, and their money, safe.
Dr Anna Tilba, from Durham University Business School, has offered pensioners tips and tricks to avoid being caught out.
She said: “Coronavirus is creating favourable conditions for scammers who pray on vulnerable people and take advantage of panic, uncertainty and financial strain.”
She warned pensioners to be vigilant of out of the blue opportunities of very high investment returns, stating these are probably a scam.
Dr Tilba also advised people to avoid cold callers who wish to discuss pension plans, whether it be on the phone, via text, email or social media.
For those under the age of 55, offers of ‘free pensions advice’ or ‘free pension reviews’ can often be fraudulent, so extra care must be taken.
Finally, it is important for all Britons to ensure pension advisors are regulated by the UK’s Financial Conduct Authority (FCA), which can be confirmed online.
The FCA has established a ScamSmart website which also provides further information on avoiding fraud.
The latest report from Action Fraud revealed total losses in March climbing up to £970,000.
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Other scams have included online shopping fraud, investment fraud, romance fraud and charity fraud.
Dr Tilba warned many fraudsters are convincing their unsuspecting victims to ‘protect’ their money from future economic depression during these uncertain times.
Scammers have also stated people may be able to access pension savings earlier or avoid employer insolvency.
These options often appear attractive on the surface, but can lead many down a dangerous path.
Fraudsters often charge extremely high transfer fees, which could totally destroy the savings of those who fall prey to the scam.
Fortunately, the UK Pension Regulator has provided extra advice to protect people against coronavirus scams.
Pension fund trustees have been given regular updates which urge vigilance against pension scams.
The regulator has also launched new guidance, which will allow employers to freeze defined benefit obligations for three months to help with the economic fallout of the virus.
Mark Allen, manager for fraud and financial crime at the ABI, said: “If someone offers you a deal that looks too good to be true, then it probably is.
“If you are unsure, always check the Financial Conduct Authority’s financial services register to make sure that who you are dealing with is genuine.”
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