Pension fraud is a growing and broad ranging problem facing consumers. Although Phoenix has prevented around £30 million of potentially fraudulent pension transfers over the last four years, it remains extremely concerned that pension fraud and scams are still a major threat to savers’ pensions.

In its latest piece of research¹ into pension fraud, Phoenix has found that almost half of UK consumers (44%) do not actually know how to report pension scams.

The research asked UK consumers if they would report being cold contacted about their pension – potentially fraudulently – by a company that they have no relationship with, and worryingly three fifths of adults (61%) said that they wouldn’t report it. Over 70% (nearly three quarters) of these adults said this is because they didn’t know that they could or should report cold contact officially.

When broken down by age, nearly half (48%) of the over 55s would report this contact, while only a third of 18 to 34 year olds and 35 to 54 year olds would (33% and 34% respectively).

Philip Kline, Intelligence and Investigations Manager at Phoenix, explains: “Too many people don’t know how to recognise a scam and, if they’re suspicious, they don’t know where or how to report it. They’re therefore at risk of losing their life savings. We welcome the Government’s proposal to ban pension cold calling, which will go some way towards addressing this, but we believe it’s not enough. We advocate that this ban should be extended to include all forms of electronic, written and face-to-face communications, and not just telephone calls.”

The research then asked consumers where and how they would report this potentially fraudulent cold contact*:

• 36% to their pensions provider
• 32% to Action Fraud
• 23% to Pension Wise
• 20% to the FCA
• 20% to the police
• 14% to the Information Commissioner’s Office
• 6% to the Money Advice Service
• 6% to someone else

Phoenix also asked respondents how they had reacted to being cold contacted. 7% of UK adults said that they had released some or all of their pension savings as cash as a result of this contact. An additional 14% said that they had contacted the person or organisation sending the message, while a further 15% had considered doing so.

Philip Kline concludes: “For the cold calling ban to be effective, consumers must actually be aware that it is in place and know how to report scams. Therefore, the industry should work together with the Government to increase consumers’ vigilance against scams, find a way to make it easier for people to report pension fraud and ensure the perpetrators are brought to justice.”

Phoenix recommends that consumers follow these tips to avoid being a victim of fraud:

¹ 2,002 online interviews with UK adults, weighted to reflect a nationally representative audience, carried out by Opinium Research from 16 to 19 December 2016
* Respondents were able to select more than one answer

1. Don’t allow yourself to be pressured into making a decision quickly. Pressure to make quick decisions may well increase the chance of you making a poor decision and is also an indicator of suspicious activity.
2. Think about the contact you have received. Is this how the company usually contacts you? Would your pension provider really text you about a financial opportunity? Think about whether it's sensible for the company to make contact in that way. Phoenix would not contact its customers in this way.
3. Do you need to pay up front? You should never have to pay to access funds that are yours.
4. If it sounds too good to be true, it probably is. Sometimes an offer may be articulated in a way that will not arouse suspicion. Think very carefully about the risks and the proposed benefits.
5. Be wary of any offers to access your pension early, especially before the age of 55. Ignore any unsolicited contact you receive on the subject - this could be via phone, text message, online, in person or the post. Watch out for elaborate sounding investments, particularly those based overseas. Check the FCA ScamSmart warning list for known investment scams. http://scamsmart.fca.org.uk/
6. Don’t hand over personal data until you know the company you are dealing with is regulated. If you have already done this and are concerned about how it might be used, contact your provider who can add additional security levels to provide further protection.
7. To report suspected fraud, you can call Action Fraud on 0300 123 2040 or visit http://www.actionfraud.police.uk. If you have queries about your pension, you can call Pension Wise on 0800 138 3944, The Pensions Advisory Service on 0300 123 1047 or the Citizens Advice consumer service on 03454 04 05 06.

-Ends-

Enquiries

Shellie Wells
Head of Corporate Communications
Phoenix Group
020 3735 0922/ 07872 414 137
shellie.wells@thephoenixgroup.com

Lorna Russell
Lansons
020 7294 3609
LornaR@lansons.com

Notes to editors

The Phoenix Group is the UK’s largest specialist consolidator of closed life and pension funds with over 6.1 million policyholders and £76 billion of assets held by the Group’s life companies, including the acquired AXA Wealth, SunLife and Abbey Life businesses.