With just over a month to go till Christmas, this may be one of the busiest times of the year for shoppers’ bank accounts.
Festive shopping, social outings and activities comprise many people’s spending commitments over the festive period. This grouped with the financial strain some will be feeling due to the hefty price tags in shops and supermarkets, and the pressure to spend more during the holidays, provides the perfect opportunity for scammers to strike.
Scammers are becoming more advanced and creative in the tactics they use to part shoppers and pension savers with their money. Often, fraudsters would prey on people’s anxiety for meeting financial demands and may promise no-fee loans and higher returns to savers. So, it is vital you stay alert throughout the busy festive period as fraudsters will use every opportunity they get to trick you. Watch out!
Increased risk of loan fee fraud persists
In December last year, the Financial Conduct Authority (FCA) warned of increased risk of loan fee fraud with this tendency likely to return over this year’s festive season too. The increased cost of living may be pushing many people to opt for unusual, short-term fixes like getting a loan with an upfront payment. The FCA has warned this is an extremely risky option and often is the sign of a scam so you must be on your guard.
Pension scams cost victims more than £26m
A recent freedom of information (FOI) has revealed that 1,595 pension scams were reported between 2020 and 2022. The Pensions Management Institute (PMI) said the pension scams have cost retirement savers a total of £26,420,172, an average loss of approximately £16,500. Equally worrying is the fact that a lot of pension crime goes unreported as people don’t like to admit to being duped.
Having some extra money to hand may seem exceptionally tempting, especially now we are on the threshold of another busy festive period that may be financially challenging for many people. More pension savers are expected to be interested in accessing their pension savings early because of the cost of living crisis. And scammers are likely to take full advantage of this.
They often play on savers limited knowledge and understanding of how a pension works by offering to help them access their retirement savings early. Remember, by and large most people can only claim money from their pension when they are 55 or older. Certain exceptions to this rule exist, of course, but generally speaking this is a rule of thumb for most pension savers in the UK. So, you must be wary and reject any of out of the blue offers, no matter how enticing they may sound.
So, how can you protect yourself?
Anyone can fall victim to a scam. Scammers are often charming, make attractive offers and sound like they have your best interests at heart. It’s crucial you’re able to recognise a scam and know what to look out for so you can protect yourself effectively.
Here are a few tips to help strengthen your guard:
- Always reject emails, calls and contact which are out of the blue. Callers may claim they’re from government-backed bodies to trick you into giving them information. Government organisations will never phone or text you.
- Check who you’re dealing with. If it doesn’t feel right, it probably isn’t and it only takes a few minutes to check. It could cost you your savings if you don’t.
- Avoid ‘investment deals’, ‘free pension reviews’ and early access to your pension before age 55.
- Don’t fall for professional-looking websites or brochures.
- Never feel rushed into making a decision. Take your time to check things over, even if you miss out on a ‘great’ deal.
Fraudsters are only getting smarter so you must stay vigilant.
Suspicious? Here’s what to do
If you’re suspicious, here are 3 things you can do:
- If you’re looking to turn to an independent financial adviser (IFA), make sure the financial adviser you choose is on the FCA approved register. To find a list of IFAs in your local area visit Unbiased.
- Visit MoneyHelper for some useful information on the different types of scams and how to protect yourself
- Report fraud any time of day and night on the Action Fraud website or by calling 0300 123 2040 Monday to Friday 8am - 8pm. If you are calling from abroad call +44 300 123 2040.