Most retirement savers are confident that they can spot a pension fraud – but nine out of 10 picked a scam when asked to choose from three mock-up adverts offering financial advice.
Consumer watchdog Citizens Advice asked 2,000 people whether they felt safe from scammers, and 75% said they were confident they could spot a crooked firm.
The same people were shown the adverts and asked which they trusted the most – an 90% opted for one of the scams.
“The problem for the pension industry and advisers is most people believe they are scam-proof, when the reality is they are not,” said Gillian Guy, the CEO of Citizens Advice.
“Fraudsters have professional looking web sites and leaflets aimed at tricking their victims.
Can you spot a scam?
“One of the clues that an offer is a scam is someone cold calling or getting in touch by email or text out of the blue with an offer of a free pension review or unbelievably high investment returns.”
Here are the three adverts Citizens Advice asked retirement savers to test – see which one you choose:
Source: Citizens Advice
In the survey, B was the favoured advert, picked by 64% of people, while 24% selected A and 12% chose C.
Advert C was the only one that complies with current financial advertising regulations.
Citizens Advice suggests people choose who gives them financial advice from the offer promised regardless of whether the offer is a lie.
Scam pressure tactics
When asked if they would check out the financial firm offering advice before doing business, only 45% said they would look them up online and 36% would discuss the offer with family or friends.
Only a third would check the firm is authorised to give advice with the Financial Conduct Authority, the UK regulator.
Citizens Advice found 64% of people would consider an unsolicited offer of a free pension review.
From the survey, the watchdog calculates that 10.9 million telephone calls, emails and texts were sent out to over 55s by scammers last year.
Their pressure tactics included sending documents to sign by courier, offering investment yields of more than 8% and recommending offshore investments, especially involving property.