Spotting a pension scam
Pension Scammers are continually changing direction which is why so many unsuspecting individuals from all walks of life have been persuaded to part with their hard-earned cash.
There are however, six common tactics used by the scammers, make sure you know them.
Contact out of the blue
Although pension cold calling has been banned in the UK, scammers are finding ways to get around this, they may therefore still contact you by phone and text. They have also branched out by setting up slick looking websites and are now using social media as a means to target you.
Time constraints
Scammers will put you under pressure to sign up straight away. They will make you feel as though the deal on offer is about to end or they might entice you by saying there is a bonus or discount if you sign up within a limited timeframe.
Fake reviews
Scammers will often post fake reviews or testimonials about their services so that they appear more trustworthy.
Unrealistic returns
A consistent and popular ploy of scammers has been to promise you high guaranteed returns on your investments, sometimes as high as 8%. They will often compare this to the returns you might be receiving on your existing pension pots and will try to convince you it is better and safer to transfer your money.
False authority
Scammers will often provide you with communications which will look official but often they will display fake regulatory credentials.
Flattery
The oldest one in the book! Scammers will often attempt to be over friendly to put you at ease. They deliberately talk in your language and tell you what you want to hear. Scammers are indiscriminate who they target. They only have one message – they want your money and they will stop at nothing to get it.
Remember – if it sounds too good to be true…it probably is.
Steps to protect yourself
Anyone and everyone can be at risk from a scam.
The UK Pension Regulators, Financial Conduct Authority (FCA) and the Pensions Regulator (TPR) have joined forces and produced four steps to help protect you.
- Reject any unexpected pension offers you receive by phone online or on social media.
- Check who you are dealing with before you change any of your pension arrangements. Check the FCA online register which lists all independent regulated advisers at: www.fca.org.uk or ring the FCA contact centre on 0800 111 6768.
- Never be rushed into making a decision.
- Consider getting impartial information or advice from MoneyHelper on 0800 011 3797.
The important thing to remember is that once you have parted with your money to a scammer it is more than likely you will never see this again – when it’s gone, it’s gone!
Be smart, be sure, be safe
Scammers are increasingly persuading people to transfer their money into Self Invested Pension Plans (SIPPs) and International SIPPs. These are generally much more suited to experienced investors. They can be high risk and typically have higher charging structures.
If you are not familiar with this type of investment and an adviser encourages you to invest in ‘unique’ opportunities such as storage units or investment in overseas properties, alarm bells should start to ring. In more recent times scammers have encouraged their victims to “do the right thing” and invest in ‘environmentally friendly’, or ethical opportunities like renewable energy bonds, biofuels and forestry. These types of investment are often classed as unregulated investments so if you suffer any losses the normal regulations and protections do not apply.
Remember not every adviser you speak to is out to rip you off but there is no shame in taking a few minutes to check out who you are dealing with. If you are an Usdaw member and in any doubt call us on 0161 224 2804 or email us at: [email protected]
Disclaimer
This is for educational and general information purposes only. It does not constitute any form of advice or recommendation.Visit www.unbiased.co.uk for details of independent financial advisers (IFAs) in your area. Usdaw has an affinity partnership with a group of IFAs but is unable to endorse any individual advice provided and is not liable for any subsequent business transacted directly with Usdaw members. Usdaw has endeavoured to ensure the information provided is accurate but cannot guarantee that the information is free from inaccuracies or typographical errors.