Scams awareness month 2015
Today marks the start of Scams Awareness month 2015. The aim of this month is to raise awareness about all the different types of scams people come up against on a daily basis, giving helpful tips on how to avoid them.
A pension is often a person’s biggest or second biggest asset. Unfortunately, this can attract the wrong type of attention from organisations who offer to help review your pension but in fact are helping themselves to your money.
Scams come in a variety of disguises, but in respect of pensions, a high proportion recommend a property, storage or space investment for your pension fund. The common features involved in the scam include:
- a reference to a pension review or pension survey, as being part of a Government initiative.
The new Pension Wise service and our Pensions Advisory Service always start off with you making the first call. We never make unsolicited calls.
- an offer of investments, usually promising guaranteed investment returns of 6% - 8% per annum
- often not regulated by the Financial Conduct Authority and therefore normal consumer protections do not apply
- pressure tactics are used to rush you into signing a letter of authority so that they can collect information on your pensions.
- an offer to collect your information via courier- this is a pressure tactic to get you to hand over your information quickly
- the offer to access your pension fund before the age of 55, through ‘legal loop holes’
- This is not allowed, accessing your fund before 55 could lose you your pension fund, but you could also find yourself with a high tax charge of 55% from HMRC for making an ‘unauthorised payment’.
Michelle Cracknell, Chief Executive of The Pensions Advisory Service said ‘pension scams can devastate people’s lives and their plans for the future. We receive many calls to our service from people who’ve been offered pension reviews, unreasonable investment returns or the ability to access their funds before the age of 55.
We urge anyone who is approached out of the blue to check with us first, we can explain all of the typical scam warning signs. These signs will support you in identifying any fraudulent or suspicious activities and help you to protect your pension.’
While successful investigations into pension scams take place regularly, cases are investigated subject to the availability of intelligence and evidence. Unfortunately, the prospect of recovering a lost pension fund involved in scam activity is very unlikely. Anyone who finds themselves in this position may wish to think about their future financial situation and seek guidance from our pension’s specialists to discuss their next steps.
Remember, if it sounds too good to be true, it probably is.