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TV ads to warn consumers about 'free pension review' risks

The Financial Conduct Authority and The Pensions Regulator has today launched a public campaign to raise awareness around pension scams.

TV ads to warn consumers about 'free pension review' risks

A new series of adverts will warn people about the dangers of 'free pension reviews' as part of the joint ScamSmart campaign between the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).

The adverts are targeted at pension holders aged 45 to 65 and aim to raise awareness of the most common tactics used by fraudsters. ITV will first show the adverts tonight. 

According to figures collected by the regulator, pension scam victims lost an average of £91,000 each in 2017. In addition, a poll commissioned by the regulators found that 32% of pension holders aged 45 to 65 are unaware of how to check whether they are speaking with a legitimate pensions adviser or provider.

The campaign will highlight popular tactics used by scammers, the most common being the offer of a ‘free pension review’. Recent research has found that 12% of the target age group would trust this offer. Other key methods noted by the regulators are unexpected contact, promises of guaranteed high returns and downplaying risks, offering unusual or overseas investments, pressure to make quick decisions or claiming to be able to unlock money from individuals’ pensions.

As part of the campaign, consumers will be pointed towards the FCA register to ensure they are only dealing with regulated businesses. They will also be encouraged to reject unexpected pension offers, including cold calls, and not to rush into giving out pension information.

Speaking to New Model Adviser®, TPR executive director of frontline regulation Nicola Parish said: ‘Clearly the average £91,000 lost by pension scam victims is a huge amount of money that can have a significant impact on retirement. We are trying to raise awareness to spot the signs of a scam and for people to have the confidence to put the phone down.

‘The ScamSmart website will also be updated and will ask questions about the offer the consumer has been made. It also has a link to the FCA register to check whether firms are authorised.’

While the majority of pension scams are not reported, the FCA and TPR are urging anyone who has been targeted to come forward. The campaign directs individuals to report any potential scammers to Action Fraud as the stats that the regulators currently have regarding this believed to be ‘just the tip of the iceberg,’ Parish said.

‘Although we are just targeting this age group,’ Parish added, ‘we are looking for the campaign to reach further audiences too.’

She confirmed that the advert will premier on ITV tonight in between Emmerdale to attract the target audience, and will continue to be shown on ITV on other days. A radio advert and social media campaign will also be launched alongside this.

FCA executive director of enforcement and market oversight Mark Steward added: ‘The size of individual pension pots makes pensions savings an attractive target for fraudsters. That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.

‘Pension scams can cause victims significant harm – both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website.’

Guy Opperman, minister for pensions and financial inclusion, also said: ‘Pension scams are devastating for hardworking people and can rob them of the retirement they planned.

‘I would urge savers to always exercise caution and seek independent guidance or advice before making important financial decisions. Anyone looking for free, impartial guidance on pensions can visit Pension Wise or The Pensions Advisory Service.’

The cold calling ban, due to be implemented earlier this year, was delayed prior to the summer recess. It is expected that this delay will continue until the autumn as the government consults on ‘technicalities’. 

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