Liz Field
CEO, Personal Investment Management & Financial Advice Association
Our wellbeing has been severely tested over recent months. COVID-19, unprecedented market volatility, a deep recession and resultant spike in unemployment are all contributing to an unease affecting tens of millions of people. This has been magnified by a significant upturn in fraud, targeting those most vulnerable.
“75% of all fraud crimes reported are cyber-enabled – it’s now a lot easier than robbing a bank and the rewards are far greater,” said the Commissioner of the City of London Police, at the Personal Investment and Financial Advice Association (PIMFA) financial crime conference this year. Inevitably, as the number of vulnerable people increases through the pandemic, this type of crime is being reported more and more frequently. This is why the global business spend on cybersecurity is expected to double this year, to over £130bn.
The most common scams we face
Last year, the Financial Services Compension Scheme listed their most prevalent scams as phishing (email scams) and smishing (texting scams); boiler room schemes, which promise investors an impressive return but deliver nothing but a big loss; and pension liberation schemes, which target people aged 55+ with bogus investment opportunities to try to get hold of their pension savings.
75% of all fraud crimes reported are cyber-enabled – it’s now a lot easier than robbing a bank and the rewards are far greater.
Targeting pension holders
The effects of these swindles can be shattering for an individual. The National Fraud Bureau estimates, since the outbreak of COVID-19, over £7m has been misappropriated from pension holders through scams, leaving many with little or nothing to live on in retirement.
Challenging trust in genuine financial services
Scams also directly impact public trust in the financial services industry, and the continuing challenge we face is to ensure our actions engender trust among savers and in society.
Education is key. People need to know what to look out for in a potential scam, and, importantly, what legitimate firms would never do when contacting a client.
To help the public, the Financial Conduct Authority created the Scam Smart site and PIMFA has launched its Scam Safe campaign and free, publicly accessible microsite. PIMFA will also be giving evidence at the Work and Pensions Select Committee, to raise awareness of the vital role our firms play in combatting pension fraud.