CROOKS IN £ 1BN PENSION SWINDLE
Millions of savers told: Be on your guard MILLIONS of people saving for pensions are being warned against fraudsters trying to rob them of their cash. Nearly £ 1billion is thought
to have been lost in the scams already and a Government- led task force says tricksters are coming up with new cons all the time.
Savers are particularly at risk from bogus schemes linked to the new pension freedoms which started in April this year.
Regulators fear that criminals are likely to capitalise on the changes, which allow more
‘ Their aim is to catch you off guard to steal your cash’
than 4.5 million people with defined contribution schemes access to their pot from age 55.
Fraudsters will often contact victims offering early access to their pension cash or promises of get- rich- quick schemes. Baroness Altmann, the Pensions Minister, said: “I cannot urge people enough: just hang up. No bona fide company will ever cold call you about your pension.”
She warned that the schemes often look attractive, but only ever end up with scammers stealing the victim’s money.
She added: “The criminals behind this illegal activity often lay a sophisticated trap complete with glossy brochures and professional websites that make them look highly credible. Don’t fall for it.
“Their aim is to catch you off your guard so they can steal your hard- earned savings. Scammers wreck people’s lives; it really is as plain and simple as that.”
One man nearly handed over his £ 90,000 pension pot but avoided the scam after checking with official government advice.
After being offered a free pen- sion review last year, he was persuaded to sign a form authorising the release of his pension data.
He was visited by someone posing as an independent financial adviser with a deal to invest in overseas property. Fearing a scam he passed on details to Action Fraud, the hotline for reporting financial scams. He also alerted the Pensions Advisory Service which was aware of the scammers. The hidden nature of pension cons and the reluctance of victims to come forward makes it difficult to calculate exactly how much money has been lost.
About £ 500million is known to have been transferred into bogus schemes, but the Pensions Regulator says the actual figure is likely to be “substantially higher”.
With tens of thousands of savers affected, experts say losses are likely to be closer to £ 1billion. Chief executive of the Pensions Regulator Lesley Titcomb said: “The people behind pension scams are shape shifters. They are sophisticated and well organised so we have to be resourceful, tenacious and work collaboratively.”
Project Bloom, the task force set up to tackle pension fraud, has already resulted in several police raids. So far 15 scam websites have been suspended, and the National Crime Agency has snapped up 70 domain names to prevent them from falling into the hands of criminals.
The Pensions Regulator is also investigating nine cases of suspected pension scams.
Gillian Guy, chief executive of Citizens Advice, said: “Fraudsters aren’t just trying to tempt people’s pension pots away with offers of pension schemes; they also try to entice people to hand over their money with big investment opportunities such as property abroad and fine wines.
“Think twice before responding to a cold call or an advert offering a free ‘ pension review’, or high- return investment.”
THE new pension rules – 25 per cent tax free and no obligation to buy a disappointing annuity – were popular with the public for a very good reason. Permission to do what you want with your own money will always be a crowd pleaser.
That the pensions minister worried over whether reckless people would blow their entire pot on a Lamborghini reinforced the feeling that at last the nanny state was getting its marching orders. How foolish to imagine that responsible taxpayers would do that. But if they did then it was their choice.
Of course the new rules were not introduced simply because the Government wanted to be pleasant. Many have taken cash beyond the 25 per cent and will pay tax on it – providing a nice little earner for the Treasury.
Meanwhile fraudsters, as we report, are also having a field day, cold calling potential “customers” with get- richquick deals.
One man almost signed away his £ 90,000 pension pot after he was offered a free pension review and invited to invest in some overseas property. Already no fewer than 15 scam websites have been identified. They look professional and reassuring, but beware.
The new pensions rules are still a good thing. But make sure that they work for you and not for the Government and certainly not for criminal hoaxers.