26 Jun 2020

Top tips on how to help employees avoid losing their pension to scams and fraudsters

Read our eight top tips on how to support employees approaching retirement to ensure they avoid losing their pension savings to scams and fraudsters.

1. Scams don’t look like scams

Scams look and sound legitimate by having professional looking websites and literature which is why it is easy to be deceived. Whichever option employees take for their pension income, they must check that the company is registered with the Financial Conduct Authority (FCA) before committing to anything.

2. If it’s too good to be true, it probably is

If an investment offers the opportunity of a lifetime, it’s likely to be a scam and there is little that can be done for those who fall for it.

3. Scammers will do their homework

Those who run pension scams are clever and may have been able to get hold of an employee’s personal details; not just about them, but their local area and interests. Employees need to be aware to avoid letting scammers’ knowledge and friendliness catch them off guard and allow them to be conned.

4. The right decision takes time

Genuine advisers will never rush anyone to make a decision. Anything that is advertised as a limited time offer is likely to be a scam. Employees should always check with the FCA.

5. Know the basic facts first

Pensions can normally only be accessed at the age of 55, with the exception of seriously ill-health. In normal circumstances, if a company promises to release pensions early, they are lying and it is a scam. Employees must know the facts to avoid fraudsters.

6. Know where to go for help

Employees must know where they can go if they are unsure about anything they have been offered. This is usually their employer if it relates to their workplace pension, or The Pensions Advisory Service (TPAS) or Pension Wise for any other kind of pension.

7. Protecting privacy

Scammers will use technology and try to contact individuals through various means such as social media, texts, telephone calls and emails. If employees are in doubt, they should ignore it and hang up the phone or delete the message. Phone companies should be able to help by blocking any offending numbers, while email providers can block emails from specific senders. Employees should beware of what they share through social media and check that their privacy settings are as secure as possible.

8. Help stop the scams

If an employee thinks they have been or are being scammed, they should contact TPAS immediately. Not only may they be able to help the employee involved, but they will be able to help others from falling for the same scam.

“The crucial thing to remember is that scams don’t look like scams. In our financial education seminars, we show adverts from organisations that are ‘too good to be true’ to prove how hard they can be to spot,” explains Jonathan Watts-Lay, Director, WEALTH at work. “The rule is, whatever investment employees are planning to make, they should check out the company with the FCA first. If the FCA hasn’t heard of them, employees will have no place to go if they turn out to be fraudsters.

“Employees also need to understand that taking regulated financial advice and getting the additional consumer protection it offers should not be underestimated,” says Watts-Lay. “Pension savers are at increased risk of scams and The Pensions Regulator is urging savers to seek regulated financial advice before making any decisions.

“Employers should encourage employees to visit the FCA’s ScamSmart website which includes a warning list of companies operating without authorisation or running scams,” concludes Watts-Lay.

This article is provided by WEALTH at work.