The Retirement Newsletter: Pension scams
Issue Number: -49 — watch out, watch out, there is a pension scammer about
Welcome
Welcome to issue -49 — this week, pension scams.
In this edition of the newsletter, while the websites I mention are all UK based, the general information they present and the information below is useful, regardless of where you live.
Pension Scams
Please note: The material below is based on what I have read over the years about money and pension scams. The material does not cover every type of scam or con. I am not an expert.
Pension scams are — actually, words fail me.
Pension scams are the worst in that so much money can be involved, and we can lose the benefits accumulated through our pension scheme. All those years of saving, lost.
The scams typically target saved cash and pension lump sums. So, beware.
OK, let’s look at how we can spot some scams, the types of scams used, some checks you can do to avoid scams, and what you can do if you have been scammed or a scammer approaches you.
How to spot a potential scam
Here are at least ten ways to help you spot potential scams:
An unexpected call (phone, text, or email) from a company offering help and advice — pension cold calling in the UK is illegal.
Excessive pressure on you to make an ‘act now or lose out’ decision.
An offer of a free pension review from a company you have not previously dealt with as part of your pension.
The ‘company’ contacting you doesn’t allow callbacks. They use a ’no-reply’ email address and only have mobile phone numbers.
The promise of an excessive rate of return on investments — if it seems too good to be true, it probably is. This type of ‘investment offer’ is often in odd things such as parking, overseas property, cryptocurrency etc.
Watch out for buzzwords or excessive use of jargon and phrases such as free pension review, pension liberation and pension loan. Or if the ‘company’ claims to know ‘special’ tax loopholes.
Quick and effortless transfer of your pension to a new, improved scheme.
You have to withdraw your pension money to re-invest it. In most cases, transferring directly from your pension company for a genuine investment should be possible.
Paperwork is sent to your door by courier and needs an immediate signature and return — you are not given sufficient time to read the material and review the contents.
Finally, use the Financial Conduct Authority, UK Warning Toolkit to help avoid scams.
Types of scam
Numerous types of scams can be run. These include:
Phishing — an unexpected email asking for personal information. Typically, these emails appear to be from genuine well-known companies, banks, or government departments. Once the scammer has your details, they will empty your bank accounts or set up loans in your name. Never reveal anything in an email you wouldn’t want to see posted in a local shop window.
Vishing — like phishing, but done over the phone. This is cold-calling.
Advanced fee fraud — the scammer asks you for a fee upfront to process your paperwork. You pay the fee, and they vanish.
Safe account scams — your “bank” (not really your bank) contacts you to say there is an issue with your account, and you need to move your money to a safe account. Don’t — hang up and call your bank using a number usually found on your bank cards or bank statements.
Smishing — this is similar to a safe account scam, but this time the text message asks you to update your bank details. Treat this as you would a safe account scam.
There are also many other scams, and the Money Helper website has a great list of scams and what to do if you are approached.
So, how can you protect yourself? Well, check out the company.
Check out the company/individual
You can run several checks on any company or individual offering pension advice. This is not an exhaustive list, but here are some suggestions of things you can try:
Does the company exist beyond a mobile phone number, email address and website? Mobile phone numbers, email addresses and websites are all easy to fake.
Do they have a physical building? If they do, and it is local, visit it. Go to them. If it is not local, at least look on Google Street View to see if you can see the street and a building with (hopefully) their name on it.
Financial Services Register — Financial Conduct Authority, UK — this is a register of firms and people that can offer financial advice and the types of advice they can offer.
If in the UK, check the Unauthorised firms and individuals list held by the Financial Conduct Authority, UK.
Shop around — seek advice from other Retirement Advisers. Look at the Retirement Adviser Directory — Money Helper Website, UK — for other advisers. The advice you receive from other advisors — ones you have found — should be similar to the advice you are receiving from the company.
Reporting scams
Finally, what do you do if you think you have been scammed or are the target of a scam? The best thing to do is to report it so that your local authorities can act and keep the information up to date on the types of scams, and scammers, in operation.
In the UK, you can report pension scams to:
Action Fraud — UK Police — you will need to register
Nuisance calls and messages — Information Commissioner’s Office (ICO) in the UK
Top tip
Find an independent pension adviser using the websites listed in the Useful Links section below. You approach the adviser and don’t use advisers that approach you.
Please note: The material above is based on what I have read over the years about money and pension scams. The material does not cover every type of scam or con. I am not an expert.
Useful links
Links in this newsletter:
Action Fraud — report pension fraud — UK Police — you will need to register
Avoid pension scams — The Pensions Regulator Website, UK
Be a ScamSmart investor — Financial Conduct Authority, UK
Financial Services Register — Financial Conduct Authority, UK
Find a retirement adviser — Money Helper Website, UK
How to avoid pension scams — Financial Conduct Authority, UK
Money Helper — a UK government-run website of money advice
Nuisance calls and messages — Information Commissioner’s Office (ICO) in the UK
Pension scams threat assessment: summary — The Pensions Regulator Website, UK
Retirement Adviser Directory — Money Helper Website, UK
Types of scam — Money Helper Website, UK
Unauthorised firms and individuals — Financial Conduct Authority, UK
Next week
Next week in issue -48 — suffering the winter doldrums — will this winter ever end?
Thanks
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Until next time,
Nick
PS, If you have something you would like to contribute to the newsletter — a story, advice, anything — please get in touch.
Please note: The material in this newsletter is based on what I have read over the years about money and pension scams. The material does not cover every type of scam or con. I am not an expert.