Victims of pension scams lost an average of £91,000 each to fraudsters in 2017, according to new data from Action Fraud, the UK’s national reporting center for fraud and cybercrime run by the City of London Police and the National Fraud Intelligence Bureau.
The data was gathered by the multi-agency Project Bloom group, which coordinates government, law enforcement, and regulatory agencies’ response to a scam and associated criminal activities. The group also found that two victims had each lost more than £1 million of their retirement funds to criminals.
However, the data may only be scratching the surface of the how much money fraudsters are stealing, as it is estimated that the majority of victims never contact the authorities to report their losses.
“Victims of scams are often traumatized by what has happened to them and many inevitably are left questioning how they are going to afford to retire,” Nicola Parish, The Pensions Regulator’s (TPR) executive director of frontline regulation, said in a release. “The average loss of a victim is £91,000 but these Action Fraud reports show that people can also lose much, much more.”
Scam victims reported receiving cold-calls, offers of free pension reviews, and promises that they would get high rates of return. Action Fraud and TPR warn that these are all signs of scams and should send up red flags for pension savers.
Earlier this month, a ban on pension cold-calling came into effect in the UK. According to the new law, companies that make unsolicited phone calls to people about their pensions may face enforcement action, including fines of up to £500,000 ($654,000).
“Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives,” John Glen, economic secretary to the Treasury, said at the time the ban took effect. “We know that cold-calling is the pension scammers’ main tactic, which is why we’ve made them illegal.”
But more people may be wising up to the scams. Last month, TPR said that the number of people seeking information about pension scams has soared since the launch of a joint advertising campaign with the FCA last summer. It said that prior to the campaign, an average of approximately 562 people visited the ScamSmart website each day. The site provides information on how to avoid investment and pension scams. In nearly two months after the launch, this rose by 462% to an average of 3,145 per day.