Pension scams can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.
Scammers usually contact people out of the blue via phone, email or text, or even advertise online.
Scammers design attractive offers to persuade you to transfer your pension pot to them (or to release funds from it). It is often then:
- invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units;
- invested in more conventional products, but within an unnecessarily complex structure which hides multiple fees and high charges; or
- simply stolen outright.
The warning signs that scam offers often include:
- Free pension reviews
- Higher returns – guarantees they can get you better returns on your pension savings
- Help to release cash from your pension, even though you’re under 55 (an offer to release funds before age 55 is highly likely to be a scam).
- High pressure sales tactics – the scammers may try to pressure you with ‘time limited offers’ or even send a courier to your door to wait while you sign documents.
- Unusual investments – which tend to be unregulated and high risk, and may be difficult to sell if you need access to your money.
- Complicated structures where it isn’t clear where your money will end up.
- Long-term pension investments, which mean it could be several years before you realise something is wrong.
4 simple steps to protect yourself from pension scams
Step 1 – Reject unexpected offers
Step 2 – Check who you’re dealing with
Step 3 – Don’t be rushed or pressured
Step 4 – Get impartial information or advice
You should seriously consider seeking financial guidance or advice before changing your pension arrangements.
To report a scan visit ActionFraud which also has more useful fraud and scam advice
With thanks to Safe CIC for this information.