#romancescams | Warning on pension scams as Covid fraud jumps

There has been a spike in pension scams as fraudsters eye the growing coronavirus crisis as an opportunity.

According to Action Fraud, there were 105 reports of fraud relating to Covid-19 since the beginning of February, with total losses reaching £970,000.

There were 46 such reports between March 1 and March 13, but then they suddenly spiked, with 38 reports in the following four days.

Action Fraud said the majority of reports related to online shopping, ticket fraud, romance fraud, charity fraud and lender loan fraud, as well as coronavirus-themed phishing emails.

But some emails included investment schemes and trading advice, encouraging people to take advantage of the coronavirus downturn, while others purported to be from HM Revenue and Customs offering a tax refund and directing victims to a fake website to harvest personal and financial details.

But AJ Bell has warned such scammers could turn their sights to consumer’s pensions, particularly as clients approaching retirement have been scrambling for advice amid concerns they faced “catastrophic” short-term pension losses due to the crisis.

The FTSE World index and the IA Global sector have each dropped around 20 per cent since mid-February. Clients invested in a typical balanced portfolio have seen more than 10 per cent knocked from their pot over the past few weeks.

Tom Selby, senior analyst at AJ Bell, said: “While the country hunkers down in the hope of slowing the spread of the coronavirus, the economic fallout will inevitably lead to an increase in the number of vulnerable or potentially vulnerable people in the UK.

“In such an environment unscrupulous scammers will already be plotting ways to take advantage during what for many will be a time of serious financial strain.”

He said scams claiming to allow people early access to their retirement pots could come back to the fore if we saw a surge in unemployment placing immediate pressure on household incomes.

For those aged under 55, such a move could see consumers hit with a 55 per cent unauthorised payment charge from HMRC and then charged high fees by the fraudsters.

Mr Selby added: “Scammers’ tactics are evolving all the time and increasingly we see complex schemes promoted online through social media. 

“This virtual wild west is a natural home for fraudsters, with governments around the world struggling to create meaningful protections for consumers.”

imogen.tew@ft.com

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