With the rise of pension scams, understanding the risks and communicating them effectively is crucial for prevention. As we move further into an age of online presence, the need for active scam awareness is growing.
How significant is the issue?
“Cyber attacks may be the biggest threat the financial sector faces today” – JP Morgan Stanley
Between 2020 and 2021, Action Fraud have reported that the average loss due to pension scams doubled from £23,689 to £50,949, and almost two thirds of savers had felt that pension scam tactics are becoming more sophisticated and harder to spot. In response, pension schemes and regulators placed emphasis on communication to ensure that members are more aware of the risks and consequences of pension scams.
How can Trustees communicate the risks?
An essential part of the Trustee’s role is to have sufficient knowledge of:
- The pension scheme’s key functions, systems, and assets.
- The scheme’s cyber footprint and vulnerabilities, with perhaps the most impactful being vulnerability to pension scams.
Pension providers seek to prevent scams by communicating with members throughout their lifetime rather than a single point in time, creating an active awareness and protecting the member from financial fraud. The Pensions Regulator (TPR) recommends that all schemes:
- Display warning messages across websites and apps.
- Attach links to the ScamSmart website.
- Include ScamSmart leaflets in members’ letters.
However, as the industry starts to see more people engage in their finances via phones and laptops, effectively conveying the risk of scams becomes ever more important. Using videos spreads awareness and increases engagement; studies have shown that videos generate 1200% more shares than text and images combined, and viewers retain 85% more information.
With this in mind, we have prepared a webinar on ‘How Trustees can manage their Cyber Fraud Risk more effectively’. This webinar will covers what Cyber Fraud is, where attacks are likely to come from, and how you can mitigate the risk of your fund and members from Cyber crime. It is delivered by experts from Lockdown Cyber Security and you can access it for FREE here.
While there is no absolute solution to mitigating pension scams, spreading awareness and centralising the message will reduce the number of successful attacks. The Pensions Regulator (TPR) has already seen over 600 organisations pledge to combat pension scams, with the number growing. More information is available at https://www.thepensionsregulator.gov.uk/en/pension-scams/pledge-to-combat-pension-scams
At Assure UK, we have partnered with Lockdown Cyber Security to provide Trustees with information on how they can reduce their vulnerability to cyber attacks through our FREE webinar: How Trustees can manage their Cyber Fraud Risk more effectively | Pension Scheme Cyber Security
For more information, get in contact with us!