Pension Scams On The Rise: How To Find Out If A Company Is Legitimate

Recent data from Action Fraud has revealed that pension scam victims are losing an average of £50,000 from scams – more than double last year’s figure of £23,689.

Following the news, the FCA has said savers should think very carefully if they are approached with online offers. Spotting a potential fraudster isn’t easy, but there are several telltale signs to look out for if you want to keep your cash safe.

James Andrews, senior personal finance editor at money.co.uk, said: “The key to not falling for an online pension scam is doing your research on the company.

“As always, details are key. Search on google to find out if the company has a physical location somewhere in the world. Then, you can go on sites such as Trustpilot to see what people are saying about the company. Be sure to also check out the company’s website and social channels to see if they look authentic.

“When you’re dealing with a company that specialises in financial services or products, it’s crucial you check their details on the Financial Conduct Authority (FCA) register.

“This is a database that holds details of every financial company that’s registered with the FCA and you can search for a specific company by name or postcode. If a financial company isn’t on the FCA register, avoid them at all costs.

“Another helpful resource is the UK government’s Companies Houses website, which reveals the millions of companies trading, or once registered in the UK. It’s a good idea to check any suspect company out – just like with the FCA register, if it’s not on the site, you shouldn’t be using it.

“How you are approached also matters. There simply aren’t firms out there with fantastic returns or offering early access to pension cash on the hunt for customers. If what they were claiming was real, they would be swamped already.

“Be suspicious of adverts on social media or even Google, emails from anyone you don’t already have a relationship with and remember that all pensions cold calls are now illegal – so if you get a call, or know someone who has, it can only be from scammers.

“The way a company asks you to pay is another good indicator of its trustworthiness. Fraudulent companies will often ask you to pay via direct bank transfer, whereas this is rare with genuine pension providers as the transaction is not protected.

“In the past, a simple way of vetting a website was to look for the padlock symbol in the URL bar. However, the more sophisticated scammers have found ways to forge the symbol, so it’s important to carry out other checks before you decide whether a company is trustworthy.

“If you think you’ve fallen victim to a scam, you must tell your bank immediately. Once they have been informed, they can increase the security on your current account temporarily to prevent further money being taken.

“It’s also a good idea to report details of the crime to Action Fraud, who will be able to investigate further. For a comprehensive guide on how to deal with fraud, visit https://www.money.co.uk/guides/how-can-i-check-if-a-company-is-legitimate.htm”