Fraudsters claim to be pension providers, insurers and other companies and contact people or business owners via emails, calls or texts. Victims are then prompted to provide personal information or money.
The Financial Conduct Authority said the current coronavirus pandemic is making people more vulnerable to market volatility.
The FCA issued a warning earlier this week stating that pension savers face risks due to the increased flexibility they have over their savings since the pension freedoms were introduced in 2015.
HSBC UK figures show £5 million were lost to scammers pretending to be legitimate investment companies in the period of 2019/2020.
Since the voluntary authorised push payment (APP) scams reimbursement code was introduced in May 2019, HSBC UK customers who were victim to investment fraud had larger amounts of money taken from them than any other type of APP scam, an average of £15,481 per case.
The bank warned some investment scams include fake bonds. Fraudsters copy real companies’ websites.
James Hewitson, head of wealth management at HSBC UK said: “We’re aware that fraudsters are using the coronavirus outbreak to take advantage of people who may be in an anxious state and facing financial difficulty.”
Pete Glancy, head of pension policy at Scottish Widows, warned: “Once you’ve handed your money over to fraudsters, there is often little chance of getting it back. They’re ready and waiting to disappear without a trace.”
He said a “big red flag to watch out for” is anyone asking you to withdraw money urgently from your pension or bank account for an investment opportunity.
Other scammers claim that the victim’s insurance has been cancelled, reassuring them it could be reinstated in exchange for an additional fee.
The ABI asked people to not feel under pressure to accept the offers when they seem too good to be true.
Mark Allen, the ABI’s manager, fraud and financial crime, said: “If someone offers you a deal that looks too good to be true, then it probably is.
“If you are unsure, always check the Financial Conduct Authority’s financial services register to make sure that who you are dealing with is genuine.”
Stephen Dalton, head of intelligence and investigations at the Insurance Fraud Bureau, said: “It’s important for the public to be wary and do basic checks.”
Charlotte Jackson, head of pensions operations and consumer protection at the Money and Pensions Service, said: “Difficult as it is, the most important thing is not to panic or rush into making any decisions about your pension at the moment.”
Detective chief inspector Andy Fyfe, head of the City of London Police’s Insurance Fraud Enforcement Department (Ifed), said: “Several of Ifed’s past cases have involved fraudsters who exploited other human tragedies, such as the Grenfell Tower Fire and London Bridge terror attack, and the Manchester Arena Bombing.”
— to www.express.co.uk