Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Corporate Crime & Compliance UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (April 1, 2020, 12:19 PM BST) -- Britain's finance regulators said Wednesday that consumers should be on the lookout for fraud and pensions scammers taking advantage of the COVID-19 outbreak.
Conmen will take advantage of vulnerable consumers who are worrying about how their finances will be hit by the coronavirus crisis, the Pensions Regulator, the Financial Conduct Authority and the Money and Pensions Service said.
"We're urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorized by the FCA," Mark Steward, the FCA's executive director of enforcement and market oversight, said, as the outbreak, which has infected more than 700,000 people worldwide, continued to batter economies.
Steward said consumers should reject all unsolicited offers and should get to know the warning signs of financial fraud, including "high rates of return which sound too good to be true, so-called special offers or pressure to make a quick decision."
The regulators said that savers may be particularly concerned about their pensions because of volatility in the stock market caused by the impact of COVID-19 on businesses. Scammers could exploit such anxieties by trying to convince consumers to transfer their pensions savings.
"For those on the point of retiring, the impact of the virus on the financial markets and therefore on pension savings has been damaging," Charlotte Jackson, head of pensions operations and consumer protection at the Money and Pensions Service, said.
Jackson added that those nearing retirement should not panic and take time to make decisions about their pensions.
Charles Counsell, The Pensions Regulator's chief executive, said that pensions remain a safe long-term investment. "It's important to avoid hasty decisions about cash that's taken a lifetime to build," he added.
The regulators said that staying in the existing scheme is still likely to be the best long-term investment for those who have a final salary pension.
The Pensions Regulator said it is working with trustees of defined benefit schemes to make sure the investments are protected.
Analysis by the Financial Conduct Authority and The Pensions Regulator suggests that victims of fraud could lose an average of 22 years of their savings, or £82,000 ($100 million), within 24 hours of being targeted by crooks.
Regulators are clamping down on investment scams. TPR said in February that it is working with industry groups including the Association of British Insurers and the Pensions Administration Standards Association to shape a survey about pensions scams to help it decide where to focus resources in the war against scammers.
--Additional reporting by Joanne Faulkner and Najiyya Budaly. Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
