A new football-themed campaign to flag the risks of pension fraud is being fronted by legendary commentator Clive Tyldesley.
Men in their 50s, who are the ‘average victim’ of pension scammers, are being urged to show them the red card by the veteran voice of football matches.
The effort to raise awareness about typical pension scams comes as it emerged savers have reported losses of nearly £31million to Action Fraud since spring 2017.
A scam prevention campaign is being fronted by legendary TV commentator Clive Tyldesley
Putting time pressure on pension transfers is a key tactic for scammers, according to the money watchdogs behind the campaign.
They often create ‘time-limited offers’ or set deadlines on attractive-sounding opportunities to pressure people into releasing money from their pension pots.
‘Scammers are very good at breaking down your defences and putting you under pressure with various deadlines,’ says Tyldesley, who is aged 65 and has spent three decades as the voice of ITV football.
‘But your pension isn’t a football transfer – there are no deadlines. Your favourite team wouldn’t buy a new striker just because his agent says he’s good.
‘They’d ask around, check out his stats, do some research – just like you should when handling your pension plans.
‘Before you fall foul to savvy scammers, remember to take your time, seek advice, and speak to an FCA authorised adviser. Don’t agree to anything you’re unsure of.’
Many people know more about football finances than their own lifetime savings, say the Financial Conduct Authority and The Pensions Regulator, explaining the move to recruit Tyldesley to help raise awareness of scams.
They know the cost of items related to their team, such as a football shirt or season ticket, but not how much is currently in their pension pot, according to a survey of 2,000 people carried out in July.
Powerful but subtle pension scams unmasked
A psychologist reveals five mind tricks that fraudsters use to steal your cash here.
Overconfidence could be an issue with nearly 65 per cent saying they could spot a scam approach.
The survey found 39 per cent of people would fall for a common scam tactic like a time-limited offer or the promise of a guaranteed high return.
Savers can test if they would do better at spotting scams by taking a quiz on the regulators’ ScamSmart site here. See below for advice on how to avoid scams.
The coronavirus pandemic has prompted warnings to savers who are made redundant or struggling financially against scams luring them to access or move pensions.
Taking money from pensions before you are 55 is especially hazardous, because the taxman slaps a heavy penalty on early withdrawals and the rest of your pot may then be lost in high risk investments or stolen outright.
The taxman still imposes the penalty even if the pension money has gone.
This is Money’s pension columnist, Steve Webb, recently warned a reader aged 39, who had lost their job and was in debt, not to try to unlock their £18,000 pension early.
Mark Steward of the FCA says: ‘During these uncertain times, it is more important than ever to defend your lifetime savings from scammers.
‘Fraudsters will seek out every opportunity to exploit innocent people, no matter how much or how little you have saved.
‘You can check the status of a firm before changing your pension by visiting the FCA register, and get advice from an FCA authorised firm before making any changes to your pension.’
Charles Counsell, boss of The Pensions Regulator, says: ‘Scammers wreck lives and no matter how big or small your savings are, every pot is a target.
‘It may seem tempting to make a change to your pension fund now, but it’s important not to rush. Before making any decision about your pension, take your time, and visit the ScamSmart website to always check who you are dealing with.’
What do pension experts say?
‘Football fans know a lot about scammers generally – dodgy tickets and the infamous case of Ali Dia, who scammed Southampton manager Graeme Souness into playing him in the Premier League in 1996 by pretending to be George Weah’s cousin,’ says Bart Huby, senior partner at LCP.
Phrases pension fraudsters use that should set alarm bells ringing
The offer won’t last long
You’re entitled to a free government review
You’ll make a better return by investing in storage units/forests/overseas property
There’s a guaranteed 7 per cent return
We’ll send a courier over with your documents
Can you sign quickly – I’m parked on a double yellow line
There’s a legal loophole
You’re a sophisticated investor
Your pension company might try to talk you out of it – they just want to keep your money
‘But spotting a pensions scammer can be much more difficult and we welcome this imaginative new initiative to include Clyde Tyldesley in the campaign.
‘However, until the long awaited pensions dashboard project is complete, many football fans (like everyone else) will still find it difficult to readily access comprehensive information about their pension savings.
‘Many fans do a lot of research when it comes to picking their Fantasy Football team, but know much less about their pensions.
‘Unfortunately this leaves them exposed to scammers. Spending time finding out more about your pension is time well spent.’
Michael Cotter, specialist financial services lawyer at Setfords Solicitors, says: ‘One of the most pressing financial issues facing people during this pandemic is not understanding their true financial position.
‘Misinformation, anxiety and panic are a toxic cocktail for consumers looking to make sound decisions about their financial futures.
‘I am certainly seeing a rise in emerging unregulated schemes, and right now persuasive fraudsters are increasingly able to get the ear of investors and talk them into making very bad decisions.
‘I know the havoc, pain and distress these scams inflict on victims. I have encountered parents terrified of their future, with their pension decimated, giving them nothing to leave their children and further worrying about their own future care needs.
‘I have assisted a broken mother, who, saved a pension pot working multiple jobs only for it to be eroded due to an encounter with a scammer.’
Where to go for help
Action Fraud: If you suspect a fraud, report it to the UK’s national fraud and internet crime reporting centre, Action Fraud on 0300 1232040.
The Pensions Advisory Service: Offers free and impartial guidance on pensions and will tell you how to spot a scammer.
Pension Wise: Over-50s who want to take advantage of new pension freedoms can make a face-to-face or phone appointment with the Government’s free guidance service on 0800 802 1345, or call 44 20 3733 3495 if you live outside the UK.
Pension Tracing Service: Some scammers will offer to help you find lost pensions but the Government will offer free help. Take care if you do an online search for the Pension Tracing Service as many companies using similar names will pop up in the results. These will also offer to look for your pension, but try to charge or flog you other services, and could be fraudulent.
How do you avoid a pension scam?
The regulators recommend the following steps.
1. Don’t be rushed or pressured into making any decision
2. Reject unexpected pension offers whether online, on social media or over the phone
3. Check who you’re dealing with before changing your pension arrangements – check the Financial Services Register or call the FCA helpline on 0800 111 6768 to see if the firm you are dealing with is authorised
4. Consider getting impartial information and advice (see the box on the right).