Read these tips to stay protected against fraud
Keeping your savings safe from scams
New measures are being introduced to tackle pension scams, but there are also steps you can take to keep your money secure.
Saving for retirement? Unfortunately, fraudsters are counting on it. With increasingly sophisticated scams being set up to target your money, it’s important to be aware of the latest threats.
Your pension pot is just one area of your finances that could be at risk. But it’s a risk that’s increasing, with fraudsters taking an estimated £43 million from pensions since April 2014, figures released this year show1.
The government has announced plans to ban unsolicited texts and emails in relation to pensions, which is one way fraudsters first make contact2. However these changes will only come into effect once legislation has been passed by parliament, and it’s important to keep safe in the meantime.
Through email, text and even in person, scammers are convincing savers to hand over their money, only for the victims to suffer heavy losses from bogus investments.
Cold calling about pensions soared after the introduction of ‘pension freedoms’ in April 2015, which allowed people to withdraw their entire pension at 55.
But it’s not just your pension pot that could be at risk, and there are other deceptions to be aware of too. Here are some of the key scams to look out for to help you avoid becoming a victim.
Watch out for pension liberation
One of the most common ploys fraudsters use is to persuade you to withdraw some or all of your pension before the legal minimum age.
Any scheme offering to help you release pension money before 55 is almost certainly a scam, as early withdrawal is only possible if you are terminally ill or fall into one of the exempted professions, like fire fighters.
You could face a tax of 55% on what you withdraw before you turn 55, and you will still owe this levy even if the money has all been spent3.
Until the government ban is in place, you could receive an unsolicited phone call, email or even a knock on the door offering you a free pension review and early access to your savings. The scheme might falsely claim to exploit obscure loopholes in the law relating to the minimum age for withdrawal.
Savers may be offered a loan against their pension. Action Fraud, the UK’s national fraud and cyber crime reporting centre, has found that to get this cash advance, customers can be told they must transfer their pension fund to another firm4.
However, once this transfer has gone through, the customer generally only gets a small cash sum, while most of their money will have been stolen. In some cases an entire pension pot disappears into a scammer’s bank account.
Email fraud – called ‘phishing’ – is designed to entice you into visiting a scam website or downloading an attachment.
The emails usually include information to get you to act, such as stating that your bank account has been compromised or that you’re entitled to a refund. If you follow the link, it will prompt you to enter crucial personal information or bank account details. If you download the attachment, it’s usually a virus that infects your phone or computer with malware – designed to steal personal information or banking details.
Understanding the warning signs is increasingly important. If you’re unsure about an email, don’t click on any links, delete it and block the sender’s email address. You can also check the 'From' section in an email to check it’s from who it purports to be. It’s also useful to keep your cyber security up to date.
If you’re after further information, the Met Police Little Book of Big Scams is packed with online security tips on everything from phishing to courier fraud.
Unregulated investment schemes
Fraudsters may try to persuade savers to invest their pension money in unregulated investment schemes5. These are not authorised or recognised by the Financial Conduct Authority, the regulator, and are often based offshore. While not necessarily illegal, they tend to be highly risky. They are therefore not suitable for pension savers.
The sales pitch for such schemes can sound very convincing. You may be promised eye-watering profits in exotic investments, such as diamonds or overseas holiday properties.
While some of these schemes may be outright scams, others may be volatile and risky – and very expensive. Often the investment charges and commissions can simply eat up the victim’s pension savings. Of course, these charges are rarely disclosed at the outset.
Text message fraud – sometimes known as ‘smishing’ – is becoming more pervasive and means criminals can actively target you whether you’re on the move or at home.
“Text message fraud is something that we’re seeing more and more – and it can be difficult to spot,” says Prudence Smith, Barclays’ Head of User Behaviour and Awareness.
“Scammers can insert a fraudulent text into a trail from a legitimate company and spoof the telephone number so only a couple of digits are different. People need to be alert on their phones as well as computers.”
Just keeping in mind that not all text messages are genuine – no matter how realistic they seem – can help you to spot a smishing scam, but read on for more tips on how to stay safe later in this article.
Remote access fraud
Remote access fraud is when a scammer calls you and attempts to convince you that your computer or tablet is experiencing technical problems. They say that the solution is to give them remote access so they can solve them.
Prudence says it’s important to be aware of remote access fraud, as scammers are increasingly targeting individuals instead of large firms.
“Humans are the weakest link because we have feelings and emotions,” she says. See below for tips on how to stay safe.
Protect yourself from fraudsters
Never be rushed into making a decision
Scammers will insist that an offer expires shortly or could pressure you by sending a courier to your house to pick up signed papers. You can check whether the deal you’re being offered is officially listed as a scam, or is likely to be one, with the Financial Conduct Authority.
Check an adviser is genuine
Scammers often pose as financial advisers. All genuine advisers will be listed with the FCA and will be on the financial services register.
Fraudsters will often produce detailed brochures and sophisticated websites to appear authentic, so don’t be fooled by appearances6.
Don’t share confidential details
Many of the scams listed in this article involve fraudsters contacting you by telephone, text message and voicemail – or on social media or other websites – in an attempt to get you to share confidential details or hand over money.
This is done by posing as a company you recognise, often your bank. Always keep in mind that genuine companies will not ask you to transfer money to another account or request you to provide confidential details – such as your PIN – if they contact you.
Report a scam
Also, remember that the ban on cold calling planned by the government only relates to pensions7. Unsolicited calls will still be allowed for other products and services, and the ban will not stop calls from abroad, so it’s important to remain vigilant.
How we can help keep you safe
We take your security seriously and have a range of tools and processes in place to help keep you safe, including PINsentry, our Online Banking security system, and our continual monitoring for suspicious activity on your account.
We’ve recently introduced an online fraud-intervention service if you use Online Banking – the first UK high-street bank to do so. You’ll now be asked 3 fraud-prevention questions immediately after making an online payment that appears suspicious and out of character. If you have any doubts about the payment after answering the questions, you can call us immediately using the number on the back of your card.
“With the average British person being targeted 12 times over the past 12 months8, it has never been more vital for us to lead the fightback against the fraudsters and increase the public’s resilience to cyber attacks, helping them stay secure in the digital age,” says Ashok Vaswani, CEO Barclays UK.
How you’ll know it’s us
As part of your Premier service, your relationship manager will contact you to ensure you are getting the most from Premier – but it’s important for you to be sure it’s us.
Fraudsters can use fake numbers to make it look like calls or texts are coming from us, so here’s what you need to know to help you stay safe from scams.
We’ll never ask you to
- Tell us your PIN, password or PINsentry codes
- Divulge your log-in details for Online Banking or Barclays Mobile Banking
- Transfer money to a ‘safe’ account
If you’re suspicious of a call or text, you can call the number on the back of your debit card or use the ‘Call me’ function in Barclays Mobile Banking.
We don’t provide financial, tax, legal or pensions advice. So nothing in this article should be construed as constituting such advice and we would strongly recommend that you take financial, tax, legal or pensions advice tailored to your own individual circumstances.
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