Food Allergies and Pension Scams
Last weekend, the guest on the BBC Breakfast sofa was said to have a mushroom allergy. There are 14 food allergens and mushrooms is not one of them.
(If you are interested, the 14 allergens are celery, mustard, gluten, lupin, crustaceans, molluscs, fish, eggs, milk, nuts, peanuts, sesame seeds, soya, sulphur dioxide.)
So, the man on the sofa may not have liked mushrooms (or they may “disagree” with his constitution) but he does not have an allergy. This leads to a scenario where he could demand his money back from a restaurant that served him food that contained mushrooms when he had flagged that he did not want any food containing mushrooms but he could not sue the restaurant for causing an allergic reaction.
The analogy is pension scams. Increasingly, we are seeing “legal pension scams”. This is where the customer is transferring their money into a completely legal pension wrapper and investing the pension pot in a permitted investment. It just happens that the investment is particularly “smelly” with high charges, high risk and totally “disagree” with the needs of the customer.
With these new “legal pension scams”, we need to think about our approach to protecting customers. Everyone is supportive of the ban on cold calls but this will not stop pension scams. Equally, putting measures on pension schemes/providers to check the destination of the pension pot will not stop pension scams. We really need to raise awareness with customers about:
- Why scams exist – your pension fund is your biggest or 2nd biggest asset so it provides rich pickings for scammers
- Why you need to be aware – if the scheme is legal, your scheme/provider has an obligation to act on your instructions
- Why the investment of your pension fund is critically important – the investment may not be regulated so you have limited/no protection if the investment fails
- Why the investment may not be suitable – the charges, the ability to sell, the income it delivers, the volatility need to be considered
This is why it is worth checking with us, The Pensions Advisory Service, before disclosing any details of your pension to an organisation that has approached you out of the blue.
A mushroom may look like a mushroom, smell like a mushroom, feel like a mushroom but be an inedible mushroom that will have a very bad effect on you.