Fraud costing pensions sector £6 billion per year

According to research from the University of Portsmouth’s Centre for Counter Fraud Studies, fraud and scams are costing the UK pensions sector almost £6 billion a year.

The private sector suffers the worst loss, estimated at £4.9 billion per annum. The largest cause of loss is investment fraud, at £2.88 billion each year, with payment fraud costing £1.68 billion. Furthermore, payroll and purchasing fraud cost the pensions sector £330 million.

Government and public sector pensions to lose around £1.1 billion per year.

The major risks to the pensions sector have been identified. This includes internal fraud, identity fraud and cybercrime. Research shows that 25% of scheme surveyed did not have plans in place to respond to cyber threats.

The pensions sector remains at critical risk to fraud, given the scale sum and diversity of investments pension schemes are responsible for. Further to this, counter fraud and cybercrime processes are ‘not yet fully adapted to the rapidly evolving threats’.

Fraudsters regard pensioners and prospective pension beneficiaries – who have low levels of engagement with their retirement savings and finances – as easy targets.

The Merseyside Police provide ‘Ten golden rules’ to help prevent fraud:

  1. Be suspicious of all ‘too good to be true’ offers and deals. There are no guaranteed get-rich-quick schemes.
  2. Don’t agree to offers or deals immediately. Insist on time to get independent or legal advice before making a decision.
  3. Don’t hand over money or sign anything until you’ve checked someone’s credentials and their company’s.
  4. Never send money to anyone you don’t know or trust, whether in the UK or abroad, or use methods of payment you’re not comfortable with.
  5. Never give banking or personal details to anyone you don’t know or trust. This information is valuable so make sure you protect it.
  6. Always log on to a website directly rather than clicking on links in an email.
  7. Don’t just rely on glowing testimonials. Find solid, independent evidence of a company’s success.
  8. Always get independent or legal advice if an offer involves money, time or commitment.
  9. If you spot a scam or have been scammed, report it and get help. Contact Action Fraud on 0300 123 2040 or at Action Fraud. Call the Merseyside Police on 101 if you know the suspect or they’re still in the area. If you’re deaf or hard of hearing, use their textphone service on 18001 101.
  10. Don’t be embarrassed about reporting a scam. Because the scammers are cunning and clever there’s no shame in being deceived. By reporting it, you’ll make it more difficult for them to deceive others.

‘It is important to be sceptical when receiving emails and phone calls. Always make sure that the person you are speaking to is who they say they are. Also, do not give personal information away over the phone or via email unless you know who you are speaking to.’

Nigel Holland commented