Fighting pensions scams and financial fraud

The launch of a new scam-fighting plan by The Pensions Regulator (TPR) has highlighted the heightened dangers of fraud and scams during the cost-of-living crisis. The pressures caused by the crisis leave savers vulnerable while people’s need to make the most of their money in the current climate can also create multiple opportunities for fraudsters.

Being targeted by fraudsters can be distressing, while sorting it out can be time-consuming, as well as taking a toll on finances. Here, we highlight the steps necessary for protection against fraud and scams.

Scam-fighting plan

The TPR launched its scam-fighting plan with a warning that the cost-of-living crisis may leave savers more vulnerable to scammers. The regulator says that some will be tempted to access their pension savings early to cover essential household bills or be attracted by fake investments offering high returns that never materialise.

In response the TPR is aiming to make savers aware of the risk of scams and encourage pension schemes to adopt higher standards of protection for savers’ pots.

It also wants to secure the intelligence necessary to pursue and punish criminals.

Pledge to combat pension scams

The TPR has already been running a pledge campaign since 2020. This has seen more than 500 organisations and schemes make the pledge or self-certify that they meet the campaign’s scam-beating standards.

TPR estimates that around 16 million pension pots are now better protected thanks to the campaign.

Protecting your pension

It is crucial that pension savers know who they are dealing with, so checking the FCA Register is imperative. Dealing with an authorised firm gives access to the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), which can hold firms to account and give financial protection.

Changing tactics

The issues around pensions scam also help shine a light on the need for people to protect themselves from fraud and scams in the current economic climate.

The fraud prevention body Cifas says fraudsters are using trends caused by the cost-of-living crisis to change their tactics. It has seen an increase in criminals posing as energy companies claiming they can offer a better deal, or as supermarkets offering money-off vouchers.

Scammers have also been using the energy rebate scheme to try and trick people into handing over their banking details.

Protecting personal information

The key to protection from the scam is by keeping the lid tightly sealed on all personal information. If lost, personal information can be used to fraudulently apply for loans, goods or services. It can also be used to take over or using an existing product, not necessarily just open new ones.

This means safeguarding sign-on credentials and passwords for online banking, retailers and other websites that may store financial information. Password managers can be a great way of creating strong passwords and keeping track of them.

Also, when looking for websites make sure the URL is correct and that it has https at the start, or a little padlock – these mean it should be secure.

It is also prudent to keep settings on the highest privacy level on all social media accounts.

Shred documents

Although most identity theft happens online it is still important to be careful with letters and other documents. Bills, statements and invoices often have names, addresses and account details on them. It is good practice to shred any document with your personal details on it rather than risk someone finding it in the bin or on a landfill site.

Watch out for red flags

According to the Information Commissioner’s Office, there are a number of red flags that will alert you to someone else using your identity. If bank statements dry up, you start to receive letters or demands for debts that aren’t yours or you are turned down for financial products such as credit cards or a loan, despite having a good rating, these could all be red flags.

Report any suspicious activity on your account – even if you are not certain it is the result of fraud – to your bank, to Action Fraud and Cifas.

Everyone is a potential target for fraudsters and scammers, so always check before you respond to messages, even if they appear genuine at first sight. Be careful to protect both your pension and your personal details. If in any doubt, please do get in touch.