Savers reviewing retirement plans urged to watch out for online scammers

People reviewing their retirement plans as the new financial year gets under way are being warned to watch out for online pension scammers.

Pensions Minister Guy Opperman, who issued the warning, said some tech companies must do more to crack down on scam adverts.

The 2021/22 financial year started on April 6.

Mr Opperman said: “Scammers who steal people’s hard-earned savings are the lowest of the low and the Government is working closely with its partners on the best ways to combat, and raise awareness of, pension fraud.

“I have been very clear that some tech companies are failing pension savers; they must do more to crack down on scam adverts and should use their existing powers to verify advertisers and stop taking money from fraudsters who are online scammers using their site to promote fake adverts.

“My message to savers is simple: If you are considering making changes to your finances and retirement planning this new tax year – stay on your guard, and speak to a legitimate independent financial adviser or consult Pension Wise, which is free and independent.”

The Work and Pensions Committee recently said an “online free-for-all” has allowed scammers to advertise while tech giants “line their pockets”.

It said tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings

In response to the committee’s report, Google said it takes dishonest business practices and misleading ads very seriously and consider them to be a violation of its policies.

Google said previously that, last year, it updated its financial services policies and removed 3.1 billion bad ads from its platforms, of which 123 million were ads related to financial services.

The Government said that in a recent meeting with Google, Mr Opperman had urged the tech giant to use existing powers to verify advertisers and stop online scammers using its site to promote fake adverts.

New powers in the Pension Schemes Act will contain measures to empower pension schemes to take action where they suspect scam activity, and to require members to take guidance if they wish to make certain transfers.

The measures will enable trustees to prevent a transfer in certain circumstances – such as when the transfer is raising “red flags”, triggered by who is involved in the transfer.

These protections are part of wider measures to protect consumers from pension scams, including the ramping up of communications with those over-50 about their choices ahead of retirement.

Here are the Government’s tips to avoid pension scams:

– Be wary of offers found online. Some adverts hosted by tech giants can be fake or link to dodgy offers.

– Scammers often approach unannounced – by phone, email, social media, text, letter or even on your doorstep. In 2019, the Government banned cold calling in relation to pensions so all unexpected calls, emails and text messages should be treated with extreme caution.

– If someone appears out of the blue, and offers a “free pension review”, be wary. Offers or mentions of “one-off investments”, time-limited offers, up-front cash incentives, “legal loopholes” or even “government initiatives” can be pension scam warning signs.

– If you receive an offer of high returns, perhaps of 7%, 8% or higher, but only if you transfer immediately, this should set alarm bells ringing.