FCA issues ‘magic’ scam alert 

The Financial Conduct Authority (FCA) has warned pension holders to beware of scammers’ ‘magic tricks’ as research shows the economic squeeze is encouraging more people to withdraw pension savings. 

ScamSmart 

Britain’s financial watchdog recently launched its latest ScamSmart campaign aiming to give consumers the knowledge and tools to avoid scams. Over 700,000 pension plans were accessed for the first time in 2021-22 and FCA research suggests that number could increase this year, with a quarter of all pension holders considering an early raid due to cost of living pressures. This puts a significant number of people at risk of potential scams. 

Pension scam tactics 

Scammers typically prey on consumers’ misunderstanding of how pensions work and pension pots grow. To help people avoid falling victim, the FCA has compiled a list of common scam techniques which include: high-pressure sales tactics using ‘time-limited offers’; guaranteed higher returns; unusual unregulated investments; arrangements involving several parties; any offer to release pension funds for under-55s. 

Distraction techniques 

FCA research also highlights consumer vulnerability to some classic ‘distraction’ tactics scammers employ. Around 44% of pension holders, for instance, said they would take up the offer of a free pension review, while 46% could be swayed by a scammer providing details of a third party (falsely) vouching for their offer. 

Devastating consequences 

Mark Steward, FCA Executive Director  of Enforcement, is urging consumers  to check out the watchdog’s ScamSmart website in order to “avoid being tricked  by scammers.” He added, “Pension  scammers are tricking victims with false  promises of a better lifestyle in retirement.  Like the magician’s trick, thousands can  disappear in seconds, but this time the  consequences can be devastating.”  Trust your instinct  If you ever have any doubts when contacted in relation to your pension, trust your instinct and get in touch with us. 

Trust your instinct 

If you ever have any doubts when contacted in relation to your pension, trust your instinct and get in touch with us.  

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

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