FCA issues new warning on pension scammers
The Financial Conduct Authority (FCA) has issued a new warning to vulnerable consumers who may be targeted by pension fund scammers.
New research carried out by the City watchdog found that a quarter of consumers would withdraw their pension savings to cover the rising cost of living. This makes them particularly vulnerable to scams which are fraudulently offering higher returns.
44 per cent of consumers told the FCA that they would take up the offer of a free pension review – a “classic distraction tactic” used by scammers.
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46 per cent said that they would be reassured if a potential scammer showed them third party verification, which could easily be falsified.
The FCA also warned that scammers prey on their victims’ misunderstanding of how pension savings work.
“Many of us have sat in awe as magicians make things disappear right in front of our eyes, despite us thinking we are in control, or can see everything going on,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
“But the trick ends there, and we can enjoy the rest of our night. That doesn’t happen with pension scams.
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“The rising cost of living is affecting people at all savings levels, and pension scammers are taking advantage of this. Misdirection in this context means victims are lured in with the promise of a better lifestyle in retirement, or to support their living costs with pension savings.
“The scam then takes place right in front of their eyes, and it means thousands can be lost, for good.
He added that it is important that consumers stay alert to these tricks, and visit the FCA’s ScamSmart webpage “to protect themselves before the sleight of hand can begin.”
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