BBC Morning Live financial expert, Iona Bain, said you do not need to panic, but you do need to be aware
A BBC money expert has warned pension holders to stay vigilant, with those born in 1955 or earlier singled out as being at greater risk.
Appearing on BBC Morning Live alongside presenters Helen Skelton and Gethin Jones, Iona Bain said over-70s can be especially vulnerable to a form of pension scam known as “fraud by abuse of position”.
According to Report Fraud, “data shows older people are disproportionately affected. Victims aged 70 and over accounted for more than £51 million in reported losses, while those aged 80 to 89 suffered the highest number of reports and the highest financial losses of any age group, losing almost £24 million”.
The alert comes as Bain spoke of a “really shocking story” following “new figures released by City of London Police, which is a police force that looks into fraud in the UK. It’s saying that millions of pounds collectively are being stolen from older vulnerable people through something called fraud by abuse of position”.
What is fraud by abuse of position and why does it happen?
This happens when a trusted family member, friend or carer – and in some cases even solicitors – abuses their position of responsibility and authority over someone else’s finances with the aim of stealing money, assets or property.
What makes this “particularly unpleasant”, Bain said, is that this is being “committed by someone you know and trust. In some cases, someone you might even love.
“They are doing this because you’re not in the position to fully look after your finances – maybe you’ve lost capacity. You’re really placing your trust in that person to look after your interests and look out for you. Instead, they are using that for their own gain; it’s really hard to swallow knowing this is going on.”
70 and above? You could be more at risk
If you were born in or before 1955, you could be more at risk. Data from Report Fraud shows that in the last financial year, criminals stole £93.8 million through fraud by abuse of position. However, almost half of those losses fell disproportionately on one group.
Bain warned: “Nearly half of those losses have happened to those who are age 70 above. So clearly older people are particularly vulnerable to this.”
According to Report Fraud, Detective Superintendent Oliver Little, from the Lead Force Operations Room at the City of London Police, said: “These offences can have a devastating impact because they are committed by people who have been trusted to act in the victim’s best interests.
“The fact that people aged 70 or over had more than £51 million stolen highlights the significant threat this fraud poses to older and sometimes more vulnerable members of our communities. We want families, carers and those responsible for managing another person’s affairs to know the warning signs and report concerns, so we can better protect those at risk.”
‘This issue is not widespread’, Bain says
The financial expert said that while it’s sensible to watch out for red flags, there’s no need to panic because cases like this are the “exception”, “not the norm”. Bain said to BBC viewers: “You should be aware of the problem, but not paranoid and not overly worried.”
She added there were nearly 4,000 reports of fraud by abuse of position in the last financial year. But of those, about 500 of the reports involved a social care worker abusing their position to fraudulently take money
However, asking people to take a “step back” before they panic, she said that there are over 800,000 adults in the UK receiving social care and about one million delivering that social care.
With these figures in mind, she said “it just goes to show this is not widespread and it’s not happening across the board. It’s only happening in a very small minority of cases.
“It’s true as well if we talk about power-of-attorney”, she said. Bain explains that there were 764 reports about misuse of power of attorney in the last financial year and reported losses of around £35 million.
While “a huge figure”, she said “if we take a step back, we’re looking at 6 to 8 million registered lasting power-of-attorney in place in the UK.”
Bain said possible under-reporting should be taken into account, as not all cases may have been reported, but reassured: “It’s safe to say the majority of people who have this responsibility do not abuse it.”
What to do if you are suspicious that someone is abusing your pension
The financial guru stressed that having suspicions doesn’t make you a bad person. But before acting, you should make sure you have evidence, or can at least “identify a pattern of behaviour.”
For example, if a stranger contacts you out of the blue and tells you what to do with your money, you’d likely be wary. But when it’s someone you know and trust, it can be much harder to challenge them or recognise that fraud may be taking place.
That’s why Bain said it’s important to remember the classic warning signs of fraud can still apply in these situations. You should consider the following questions:
- Are the large purchases or bank transfers happening that you don’t know about until afterwards?
- Are you being pressured to keep those decisions a secret from people you trust in your life?
- Are you being rushed into making decisions about your finances?
- Are you being pressured into making decisions?
“All of these are a cause for concern,” Bain said. Host Gethin Jones said at the end of the segment that people should not be offended. Concluding her advice, Bain agreed, adding: “If they’ve got nothing to hide, they should be willing to share everything.”
