Savers Call for Action on Pension Clone Fraud

Savers Call for Action on Pension Clone Fraud

Over three-quarters (79%) of UK savers want tougher checks to stop pension fraud, as new figures reveal that scammers have made of with at least £200m in the past year.

Trade body the Pensions and Lifetime Savings Association (PLSA) polled over 2000 UK adults to collect their views on the growing problem of fraud in the industry.

It found that a worrying 17% had been contacted by a ‘company’ other than their pension provider to discuss transferring their funds, with the majority of these (11%) contacted multiple times.

Equally concerning was the fact that over a quarter (29%) of those interviewed missed the most obvious scams when presented with a selection of scenarios – that equates to a staggering 14.8 million UK savers.

The figures come as new stats from watchdog the Financial Conduct Authority (FCA) found that almost £200m has been stolen over the past year by pension fraudsters – a figure which itself is thought to underestimate the true scale of the problem.

Investigations into 'clone fraud' have doubled over that period with some victims losing hundreds of thousands, according to The Times. The watchdog handled 90 cases in 2015, 126 in 2016 and 157 last year.

Foreign-based cyber-criminals typically persuade gullible pension-savers to transfer funds to their own fake companies, set up to mimic well-established brands. Often, convincing looking websites are crafted to add legitimacy, with contact details altered slightly to avoid suspicion.

The FCA advises savers to always check its Register first to see if the firm is listed, and not to respond to cold-calling or unsolicited emails.

The government is introducing a ban on pension cold-calling, but the PLSA says it needs to go further.

The body is calling on the government to introduce an authorization regime for pension schemes, so consumers know who they’re dealing with.

“Pension scams come in all shapes and sizes as scammers become increasingly sophisticated,” argued PLSA policy lead, James Walsh. “Whilst the government’s ban on cold calling is welcome it is only part of the solution.”

Source: Information Security Magazine