Pension savers are losing twice as much money to scams when compared to last year, new figures have revealed, as a leading expert warned police are struggling to break up foreign cyber gangs.
Statistics from Action Fraud, the UK’s anti-fraud agency, showed victims are now losing on average more than £50,000 of their pension pots after being conned by online fraudsters.
The revelation comes following a year in which online fraud has exploded as people have been forced to do more of their business on the internet during the pandemic.
James Sullivan, the director of cyber research for the security think tank RUSI, said the rise in scams coincided with English-speaking countries being targeted by highly organised gangs operating with "impunity" from Russia and other countries.
Figures from Action Fraud showed 90 people were caught up in pension frauds between January and May of this year, losing on average £50,949. The average losses for victims are now more than double compared to the same period in 2020, when the average loss was £23,689.
The figures show that scammers have already conned British pensioners out of £2,241,774 so far this year, compared to £3,505,960 in the entirety of 2020.
Mr Sullivan said foreign-based fraud gangs had been operating out of Russian-speaking countries for the last decade but were now finding more and more victims as people had become used to doing more of their personal business online.
However, he warned that Western police forces and Governments were finding it hard to disrupt the gangs and arrest the ringleaders due to them being based in hostile nations.
He said: “The point is that no Western Government has really got its act together to stop these groups, so they continue to act with impunity. For some of these states, and a lot operate in Russian-speaking countries, cyber crime is one of their primary income methods.
“There is an implicit agreement (between the gangs and authorities of those countries) that if you are attacking English-speaking countries then that’s fine.”
Mr Sullivan added the de facto protection the gangs received in foreign countries made it hard for UK police to arrest them, unless they left their safe-harbour nations.
Instead, he said the UK authorities were now focusing on a "defensive" strategy of improving the country’s cyber defences and increasing the public’s awareness of scams.
Meanwhile, the rise in pension scam losses has prompted a warning from the UK’s financial regulator, the Financial Conduct Authority (FCA), for pensioners to be wary of online ads offering easy ways to increase their returns.
More than 4 million people know a victim of a pension scam
The authority said people should treat online ads offering pension advice with the same caution they would unsolicited financial advice from a stranger in a pub.
Mark Steward, executive director of enforcement and market oversight, FCA, said: “Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying ‘yes’ to that.
“It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.
“Fraudsters will seek out every opportunity to exploit innocent people, no matter how much they have saved.”