Why are ‘too good to be true’ offers so attractive?
Maybe Lewis Carroll put it best in his classic, Alice in Wonderland:
"Alice laughed: "There's no use trying," she said; "one can't believe impossible things."
"I daresay you haven't had much practice," said the Queen. "When I was younger, I always did it for half an hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."
Now I’m not sure we all want to be like the Mad Queen, but in 2020 it seems that more and more people are able to believe impossible things, whether before or after breakfast.
Where once the public may have been relatively unmoved by Donald Trump’s cries of ‘Fake News’, this year’s US election result balanced on a knife-edge after his claims of vote-rigging and electoral tampering.
At the time of writing the incumbent has yet to officially concede that he’s lost the election, despite overwhelming evidence that Joe Biden is the next elected President of the United States, and it’s unclear whether the electors will remain faithful to voters’ choices when they put forward their Electoral College votes on the 14th of December.
Meanwhile the globe is in the grip of a pandemic scenario that wouldn’t have seemed out of place in a Hollywood movie only months ago, with vast swathes of the population confined to their houses and washing their hands every half hour in a bid to avoid the Covid-19 infection that has ravaged countries world-wide.
The economic effects of Covid-19 have been widely publicised; in the UK unemployment has risen from 4 to nearly 5% since March this year and up to 9.6 million jobs from 1.2 million employers have been furloughed under the Coronavirus Job Retention Scheme for parts of 2020, which means many may be reconsidering their financial plans as a result.
On your guard
Against this background, is it any wonder that people want to get their hands on a bit of extra cash - and that people who seem to be able to offer them this opportunity may find their messages fall on eager ears?
In fact, scams are up by 400% during this pandemic - and with the average pension scam costing the victim £91,000, this is definitely something you need to be on your guard for.
As an employer you can help protect employees from falling victim to a pension scam by:
Encouraging them to be vigilant and cautious, and stay alert to the possibility of pension scams
Warning of common scamming tactics such as unexpected contact (calls ‘out of the blue’), time pressure to act now, alluring ’too good to be true’ investment returns or early access to their pot
Providing a dedicated pensions advice hotline through a reputable company - they‘ll answer queries on your behalf, giving employees easy access to reliable information
Giving them access to pensions education and financial advice at key points in their career, particularly in the years before retirement. When the employee has a trusted relationship they can make informed decisions, and when they are confident about their existing pension arrangements they will be a lot less likely to resort to offers made by scammers.
For more information on how to spot scams, watch this video or visit The Pensions Regulator’s website.
Unlike Alice, you won’t find us through the looking glass or down a rabbit hole but you can talk to us about how we can help you with your employee communication or financial education programmes. Contact us by phone, email or social media.