How cold calls and texts can lead to financial ruin

AN increasing number of savers are losing retirement funds to scammers or opportunists.

James Walsh works for the Pensions and Lifetime Savings Association, which represents thousands of occupational pension schemes. He says: ‘People are being offered opportunities to transfer money into places where it is at great risk. Over the last couple of years our members have seen an increase in fraudulent activity and they are worried about it.’

Investors are led to these traps via websites, cold calls and unsolicited text messages. Nearly £14million was lost to a particular pension scam between November 2012 and September 2014, when 245 people were coldcalled or lured by a series of scam websites. The High Court recently ruled that four people behind the scam must repay victims following a special application by The Pensions Regulator – the first time such an order has been obtained.

As part of the order, an independent trustee can now seek confiscation of the scammers’ assets to help repay victims.

More than £1 million was paid to ‘introducers’ who first contacted the victims and encouraged them to transfer their pension funds. They were told funds would be put in lowrisk assets and bonds, but they were put into risky unregulated investments including an off-plan hotel development in St Lucia.

One couple, who lost both their pensions worth a combined £78,000, were sent details about their money being invested in a truffle tree firm. One 48year-old victim, who had given up work to care for his seriously ill partner and their three children, lost nearly £50,000 in the scam. He was promised ten per cent of the transfer as a lump sum rebate.

He says: ‘The loss of my pension will have a massive impact on my life. I feel stupid for throwing away my financial future for a lump sum of £4,200.’