It’s a sad fact of life, that some people will exploit times when others are at their most vulnerable and use this as an opportunity for fraudulent behaviour. Whilst we are largely seeing the current COVID-19 situation bring out the best in our society (in the form of selfless healthcare professionals and countrywide support for them) it has also unearthed some of the very worst – those people who see the current crisis as an ‘opportunity’ to con older people out of their life savings.
This type of fraudulent activity has spiked since the beginning of lockdown, with over a thousand individuals currently having been targetted, and a reported £2m lost from scams directly relating to COVID-19. Using tactics such as emails which appear to be sent from reputable supermarkets offering delivery slots or free vouchers, these scammers have drawn innocent customers to sites which then harvest their financial details.
Pension frauds take longer to detect, with the damage often surfacing years or decades later. Yet, criminals have been targeting people’s pension pots since 2015, when pension freedom granted savers access to their pension pots from age 55. Following on from this, it is inevitable that COVID-19 will present such fraudsters with their next ‘opportunity’.
COVID-19 presents ideal ‘opportunity’ for pension fraud
The most vulnerable in society, (older people) are naturally the prime target for pensions fraud. They are the ones who are currently the most concerned for their health and feeling isolated from the younger members of their family who may be more fraud-savvy. Individuals over 55 years old who have been furloughed or out of work, may be short of cash and anxious about making ends meet. The Coronavirus crisis has put everyone into a position where we are thinking about adapting to a ‘new normal’ so it is natural that everyone is feeling a little disorientated at the moment, and therefore more vulnerable.
Action Fraud, in March 2020 reported a 400% increase in COVID-19 related fraud and a significant increase in pension scams. These scams usually begin with a ‘cold’ telephone call or unsolicited contact by email and these methods haven’t changed through the lockdown. The only difference is that we are becoming more accepting of communicating in this way, and may, therefore, be more open to believing that the cold calling is actually genuine.
Sometimes luring their victims with promises of boosting their family’s inheritance, this type of fraud consistently runs to around £4 billion per year, but the worry at the moment is that general confusion over the value of pensions can persuade the scammer’s victims to make uncharacteristically snappy decisions – decisions which can cost dearly.
Protect yourself and your pension
There are a few things you can do to remain alert and protect yourself from pensions scammers:
- Be wary of cold callers. If you didn’t call them, (or weren’t expecting them to call you) then refuse to speak to them. If you wished to verify their authenticity, then you could refer to the FCA register to check the name of the firm and past history of any individuals.
- If it sounds too good to be true, then it most likely is. Beware of promises offering short cuts to riches – they only work for the scammer.
- Pressure selling. Real financial advisers will not put anyone under pressure to make one ‘brilliant investment’ decision. They will offer a range of solutions and clearly set out the pros and cons of each. If someone says that time is running out and you must invest today, this should instantly put up a ‘red flag’ of caution. Financial advice simply does not work like that.
- Verify their contact. If their contact information is difficult to find, then beware. Make sure you have fully verified contact details before you enter into any agreements or sign any documents.
- Claims that refer to Coronavirus. Be aware of potential COVID-19 scams and always do your homework before entering into any agreements. For your safety, speak to a trusted adviser from reputable sources.
We have adapted our approach due to the current restrictions and our team members are working safely from home but we are still able to receive, distribute and deal with post. This, combined with technology, emails and telephone communication, means we will continue to provide the usual high standards of service to our existing clients – as well as welcoming new enquiries. If you are looking for financial advice please use the “Contact us” form, telephone 01246 559955 or email firstname.lastname@example.org.
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