Watch Out for Pension Pot Fraudsters
To enjoy a good retirement with a decent pension is something many of us look forward to and save up for over our entire working life. Unfortunately, it is also something fraudsters and scammers look forward to as they aim to capitalise on the fruits of your labour by lining their own pockets with your life savings.
Since April 2015 when pension freedoms were introduced, this type of fraud has increased significantly, particularly with the over 55s. Recent information released by Action Fraud shows that, in 2017, there were 253 reports of pension fraud where the victims lost more than £23m between them, an average of £91,000 each! While this is bad enough, the Financial Conduct Authority (FCA) suggest that the real figure is likely to be very much higher as most cases are never reported.
The scam starts with an unexpected call, text, social media approach, email or even a cold caller at your door offering a free pension review. The fraudster comes across as very charming, convincing and knowledgeable offering investment opportunities for little known schemes which give a high rate of return. Not only that, but the schemes are backed up by guaranteed minimum returns and easy option termination plans with no penalty for exiting. Of course, to make the offer even more attractive, the fee for arranging the investment scheme is very minimal or even free – because the bigger prize is your pension pot. Once the funding is secured, your money disappears over the horizon with little hope of recovery.
Tips for avoiding pension scams include;
- Ignore unexpected pension offers whether made online, on social media or over the phone
- Use the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA
- Don’t be rushed or pressured into making any decision about your pension
- Always consider getting impartial information and advice
- If its too good to be true, it is!For advice on fraud and scams visit https://www.friendsagainstscams.org.uk/
- To report cases of fraud and scams visit https://www.actionfraud.police.uk/
Cllr Clarence Barrett