Pension and investment scams – how to stay safe and protect yourself

The Financial Conduct Authority (FCA) said it received 16,400 investment scam enquiries between April and September 2021. This is up by about a third on the same period in 2020.

This signals either a growth and evolution of scam activity, or better vigilance and reporting by victims of an attack.

Fraudsters are shapeshifters and well known for changing their tactics to take advantage of new opportunities. They target our pensions, investments, and cash savings, online, by phone and through the post.

Unfortunately, there’s no room for complacency. The current and future cost-of-living crisis will no doubt see a surge of new activity as scammers continue their wolf in sheep’s clothing tactics.

To help you stay safe, here’s how to spot a scam and protect your pension and investments.

What are the potential signs of an investment or pension scam?

Spotting a scam isn’t always easy, and with many people feeling the pinch because of the cost-of-living crisis, the promise of generous returns could be extremely tempting.

Fraudsters are also becoming more sophisticated. They’ll attempt to make their ‘sales pitch’ as realistic and attractive as possible. They’ll aim to build a rapport with you – sharing fake reviews, using convincing marketing and websites, or claiming to be regulated.

But the FCA says there are some tell-tale signs to look out for.

It’s unexpected – scammers often cold-call their victims. But they can also get in touch by email, SMS (text) or by post, through social media or even word of mouth.

They put you under pressure – you might be told you only have limited time to act. You might be offered a bonus or discount if you act by a set date. You should always take time to consider your options and never rush your decision.

They promise unrealistic returns – to tempt you in, scammers often promise impressive or guaranteed returns. They’ll even play down the risks. If it sounds too good to be true, it often is.

They offer a free review – scammers quite often offer a free pension review, and the chance to release money early, even if you’re under 55. Legally, unless you have exceptional circumstances, pension benefits can only be accessed after age 55.

Steps you can take to avoid investment and pension scams

Reject unexpected offers

If you’re contacted out of the blue about an investment opportunity, chances are it’s a high-risk investment, or a scam. The safest thing to do is to hang up or ignore an unexpected text or email.

Don’t give your personal information

You should never click on any link in an email or text message from senders you don’t already know. And never give your bank details, login or password information to any suspicious or unsolicited contact.

If you have any concerns about the information you’re asked to provide, don't continue with your log in. You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls or texts you receive.

Check the company is FCA-authorised

The FCA authorises almost all financial services companies in the UK. If the person or company contacting you aren’t authorised, it could be a scam.

You can check this and their registration details on the Financial Services Register. You should do this before interacting with any new company offering financial help or promotions.

Another tip is to always access the register from the official FCA website, not through links in emails or on the website of a company offering you an investment. It’s possible to direct that link to a page that looks like the FCA register, but isn’t.

Check it’s not a ‘clone firm’

Some scammers try to deceive investors by pretending to be a genuine company (called a ‘clone firm’). To make sure you’re contacting the genuine company, you should call their switchboard number, you can find this listed on the FCA Register. Remember, scammers can pretend to be any company, so this should apply to all companies – including big companies and well-known brands.

If there aren’t any contact details on the FCA Register or if the company claims they’re out of date, check by calling the FCA consumer helpline on 0800 111 6768.

If you’re dealing with an overseas company, you should check with the regulator in that country, and check the scam warnings from foreign regulators.

Check the FCA Warning List

Use the FCA Warning List to see if the company contacting you is known to be operating without the FCA’s authorisation.

Even if a firm isn’t on the FCA warning list, it might still be a scam. Scammers will change names and details all the time.

What to do if you’re suspicious, or believe you’ve been scammed

Contact your bank or investment provider immediately if you think you’ve been scammed. The quicker you express your concerns, the faster your provider can help.

If you’ve been defrauded or experienced cybercrime, you must report it to Action Fraud either online or by calling 0300 123 2040.

If you've started a pension transfer and now suspect a scam, contact your pension provider straight away. They might be able to stop it.

You should also report what’s happened to the FCA either online or by telephoning 0800 111 6768.

Help with the emotional impact of fraud

Falling victim to fraud can have a huge emotional impact. Victims can often feel embarrassed and don’t want to tell people what’s happened, even though they’re not to blame.

If you need to talk to someone about how you’re feeling, you can contact Victim Support either online or via their support line on 0808 1689111. You can also contact The Samaritans at any time of the day or night on 116 123.

If a scam has left you struggling financially, you can contact Citizens Advice to help you find a way forward. You can speak to an adviser through its national phone service, Adviceline, on 0800 144 8848 if you live in England and 0800 702 2020 if you live in Wales.

Get impartial information or advice

The FCA suggest people should seriously consider seeking financial guidance or advice before changing their pension and investment arrangements. The MoneyHelper provides free independent and impartial information and guidance.

If you’re over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through your pension and retirement options.

You can also use a financial adviser to help you make the best decision for your personal circumstances. If you do opt for an adviser, make sure they’re regulated by the FCA.

If you have any concerns or suspicions about a potential scam, contact the FCA and Action Fraud immediately.

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