If it looks too good to be true, it probably is

reviews and advice as a first step towards tricking people out of their pension pots.

The development was highlighted in a BBC Panorama programme in July which focused on a dodgy outfit selling investments in the Cape Verde islands.

The broadcast sparked a phone call from a lady caught up in the affair, put onto us by a friend.

Her situation was that, as a former council employee, she had retained benefits in the Local Government Pension Scheme (LGPS).

She was contacted by a cold call offering her a free pension review. The man that came to see her acted very much as an adviser but he wasn’t. He was just gathering information. The upshot was that it was suggested she take a transfer from the LGPS scheme. This recommendation was approved of by a financial adviser in London who she never met.

The money was being transferred to a QROPS (Qualifying Recognised Overseas Pension Scheme) that was administered from Guernsey but was resident in Malta.

QROPS are basically designed for ex-pats and perfectly legitimate in the right context.

Once the money is in the QROPS, the client can do with it what they will. The recommendation was for this money to be invested in a property development in the Cape Verde Islands.

A ridiculous and completely inappropriate scenario but in theory, nothing illegal.

The man the lady met was not an authorised adviser so there was nobody regulating him. The LGPS went ahead with the transfer because an authorised adviser (the one in London) signed off on it.

The QROPS provider had taken instruction from the authorised UK adviser to set up the plan and were then told where to invest the money. They had no reason to question it either.

There was, fortunately, a happy ending.

The lady concerned had completed all of the paperwork and the LGPS had issued a cheque to the Guernsey company.

I contacted the LGPS and, fortunately, the cheque had not been cashed. I explained the situation to them and they agreed to cancel it. And, furthermore, to reinstate the lady into the scheme even though they were under no obligation to do so. A close call. Our professional body, the Personal Finance Society, is working hard on this as all financial advice tends to get caught in the collateral damage.

Equally Citizens Advice urges you to ignore any contact you receive out of the blue about your pension be it in person, online, on the phone or in the post ; watch out for any promotion offering more than eight per cent return on your pension investment ; beware any offer to access your pension before 55 as it can mean you are hit with a high tax bill of 55 per cent as well as losing any pension savings from the scam; and be on your guard about extravagant sounding investments based overseas.

If it sounds too good to be true it almost certainly is. Trevor Law is managing director of Merito Financial Services, chartered financial planners,

based in Solihull