Pensions have been in the news a lot in the past few years, from the introduction of auto enrolment, the commencement of pension freedoms as well as the less welcome pension scandals such as those at British Home Stores and Tata Steel. Less newsworthy however seems to have been the prevalence of pension scams across the UK and now a new petition has been launched by a group of pensions experts and financial advisors led by former government pensions minister Baroness Ros Altmann.
What types pension scam are there?
Pensions liberation exists in a grey area legally in that it is not always illegal but it is almost always never a good idea for the saver concerned. This scam targets people who may be in financial difficulties and may wish to access their pension early. Unfortunately for the saver, huge chunks of their pension pot will be eaten up by fees, charges and taxes which can leave savers financially devastated.
The one-off investment opportunity
With savers having to deal with very low interest rates over the past few years, scammers promise savers amazing rates if they move their pension pot into an amazing one-off investment opportunity. As you might expect, savers don't ever see their money again.
The free pension review
Savers in this scam are lured in by scammers with the offer of a 'free pension review'. The savers are then encouraged to invest in high risk, unregulated or even non-existent pension funds or investments.
A ban on cold calling?
Some people have called for a ban on cold calling, to help prevent pension scammers finding new people to con. Ros Altmann, whilst realising this won't stop scams, does think it will help to send out a strong signal of intent that these sorts of scams will not be put up with.
"Making cold-calling illegal would certainly send a strong signal to people that this is not something they should respond to. However, it could take a long time for any changes in the law to go through – even if the Government started work now – so we need ensure there is an ongoing information campaign to warn of the dangers in the meantime."
What to do if you think you may be being targeted by a pension scam:
- Never sign or agree to anything if you are in absolutely any doubt about what is being presented to you. Take the paperwork away and get it checked by an expert
- Never give in to pressure and get rushed into making a decision.
- Ask and check if the company is registered with the FCA (Financial Conduct Authority). You can do this by calling 0800 111 6768 or go to www.fca.org.uk/register
- If they are, that still doesn't mean the person you are speaking to is really from that company. To make sure, call the company back on the number registered with the Financial Conduct Agency.
- If you think that you have been scammed, then you should contact the Financial Conduct Authority Consumer Helpline on 0800 111 6768.
- If you have lost money as part of a fraud, you should immediately call the Police's Action Fraud team on 0300 123 2040 or go to their website www.actionfraud.police.uk.
A copy of the petition can be found here: https://petition.parliament.uk/petitions/166980
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