This worries me because it means scammers get away with it and victims are left in limbo. In truth, there is no difference. We must change our thinking and we must do it now!
If money was taken through deliberate deception, it’s fraud.
Fraud is the legal category: intentional deception for financial gain. It involves deception, knowledge/intent, reliance by the victim and financial loss.
Scam is the tactic: the specific scheme, con, or setup designed to trick someone into handing over money. Most scams are fraud.
Or put simply:
FRAUD is the WHAT - SCAM is the HOW
Authorities avoid using the word “fraud” deliberately, not because the harm and deception isn’t real, but because “fraud”:
- has a high legal bar (you need to show intent and scammers can threaten lawsuits).
- is costly to pursue and is often online or international, making it even harder to investigate.
- triggers unrealistic expectations of prosecution.
Failing to think of scams as fraud minimises the problem, punishes the victims, saves institutional resources but lets a lot of criminals off the hook. Victims are encouraged to take a civil case against a scammer, but this is hopeless and an abdication of responsibility by the state. Fraud is not a civil dispute. It is a life-altering crime and is a big threat to national wellbeing.
However, it’s not just a matter of language. Being a victim of a scam can have a deep and very real impact on mental health—often longer-lasting than people expect. It’s not “just about money.”
With some older pension scams, tax charges double the trauma because they combine financial loss from the fraud with financial pressure and fear of authority. For many people, the psychological toll of a tax charge is heavier than the actual amount of tax owed. The way HMRC pursues victims makes a huge difference to mental wellbeing and changes to policy on reliefs and settlement options are essential here.
A pension scam is fraud and must always be described as and treated as such – it helps a victim mentally if the crime is acknowledged and described as fraud.
Fraud coupled with tax charges results in:
- Anxiety and chronic stress - worry about money, inability to work to socialise and make decisions. Constant worry about deadlines, letters, penalties, or enforcement and Panic attacks - tax authorities represent power - threats of penalties and enforcement can feel overwhelming. Victims experience real fear whenever official mail arrives.
- Depression - feelings of hopelessness, sadness, and sometimes suicide. More often than not, victims need medical intervention like CBT or drugs.
- Shame and guilt - many victims blame themselves and lose their confidence and self-esteem. Many relationships break down as a result.
- Anger and betrayal - especially when the fraud involved someone trusted and victims feel let down by the system too.
This is costly to society and brings pressure to an already stretched NHS.
What victims and pension providers want is for the scammers to be held to account and losses recovered from the criminals. This means pursuing criminal investigations wherever possible and not just where it is a slam dunk. But where a criminal threshold can’t be reached, authorities’ focus must on recovering assets from the scammers through POCA (the Proceeds of Crime Act). Fraudsters should not have an easy ride. Even though it costs to pursue them, the financial and psychological impact justifies the expense in the long run. We must stop referring to “SCAMS” as a thing and instead call it “FRAUD”.
Margaret Snowdon, Founder and Chair – PSIG
