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Protect yourself from pension scams

July 2021

by George Chantry

Understanding the warning signs to keep your money safe

Being online more means criminals have a greater opportunity to approach unsuspecting victims with their scams. Online scams can have a devastating financial and emotional impact on victims.

Pension scammers are bombarding the public with calls, texts and emails and it can be easy to fall victim to such a scam.

Anyone thinking about making an investment should always do their research first, visit the Financial Conduct Authority’s (FCA) website and double-check every detail before handing over any money or personal details.

How and where fraud can occur

One of the best defences is to understand how and where fraud can occur. People should be wary of unexpected contact that comes out of the blue such as cold calls, letters or emails, and they should be sceptical of unusually high or unrealistic returns. If an offer looks too good to be true, it probably is.

People should also be wary if they come under pressure to quickly withdraw money from a pension or complete a transfer. The best option for people considering transferring a pension or withdrawing money as they retire is to speak to a qualified professional financial adviser.

Unsolicited emails, texts, telephone calls

14% (7.6 million) of adults in a recent survey say they have received unsolicited emails, texts, or telephone calls from people encouraging them to transfer or release money from their pension [1]. Nearly half 47% (25 million) say pension scams are hard to spot, but only a third (32%) say they know how to report a scam.

Currently, 27% (14 million) of adults are worried that they may unwittingly fall prey to a pension scam because they’re so sophisticated these days.

How to minimise the risk of pension scams

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.

So what should you do if you have concerns and receive an unsolicited contact?

  • Hang up if you have concerns straight away. If you receive a cold call, the safest thing to do is to hang up, as chances are it’s a scam.
  • Make sure you’re aware of the warning signs. This includes unsolicited approaches by phone, text, email or even at your door.
  • Can you call the firm back? If you’re forced to make a quick decision this is a sign of a potential scam.
  • Contact details on their website may only be mobile numbers which is another red flag.
  • Understand the salesperson. Check whether the caller, or their firm, are licensed to sell. Check the FCA register of regulated companies, or the FCA warning list.
  • Make sure you ask questions. Most scammers don’t want you to investigate their ‘offers’ so make sure to do your own research and look into the company, including their financial statements.
  • And remember, if it sounds too good to be true – it probably is. Fraudsters like to offer low-risk investments with a high return.
     
    If you think you may have fallen victim to a scam, please contact your financial adviser immediately. There may be ways to limit any damage.
     
    If you’ve been caught out by a complex and convincing scam that has resulted in you transferring your money into another bank account then you should contact your bank immediately. They may be able to stop or recover the funds once they are notified.
     
    If you think you’ve uncovered an investment scam, been targeted by a scam or fallen victim to fraudsters, contact Action Fraud on 0300 123 2040 or at Action Fraud.
     
    If you feel threatened, report this to the police immediately by calling 999.
     

     


    Source data: [1] https://www.lv.com/about-us/press/14m-britons-fear-falling-victim-to-pension-scams

     

    Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.
    The Financial Conduct Authority does not regulate Tax Advice, Estate Planning or Will Writing.
    The content in this article is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.
    Pareto Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.
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