Pension pots of gold lure crooks
PENSION wealth in the UK is worth £2.5trillion, no wonder it is such a tempting target for fraudsters.
The cheats prey on vulnerable pension holders, with the surging cost of living and this week’s interest rate rise handy tools to worm their way in.
Sunday People reader Daphne James, of Cardiff, was phoned by a caller who said he was from Pension Release, a firm that facilitates the immediate release of £10,000 from your pension to pay for everyday living items and costs.
The promise of £10,000 came at a perfect time for Daphne, who was struggling with her bills.
She agreed to what was on offer and was told she needed to initially transfer her pension pot to them, then would receive the £10,000 within seven days.
Daphne was told the pension would then be transferred back to her within 30 days. Feeling confused, she contacted me, not to ask if it was a scam, but for help with how this scheme worked. Of course, it was a scam and thankfully she had a narrow escape.
There are lots of pension scams doing the rounds, many will not be as lucky as Daphne and will fall victim to one of them. The Pensions Regulator has highlighted seven of the most common pension scams. 1. INVESTMENT FRAUD Misrepresenting high-risk or false investments to savers.
2. PENSION LIBERATION
Misleading savers into accessing pension pots before 55, leaving them with a big tax bill – even if the money has already vanished in a scam – or potentially involves tax evasion.
3. SCAM PENSION SCHEMES AND PROVIDERS Setting up schemes to deceive victims that either do not exist, or exist but are committing fraud.
4. CLONE FIRMS Disguising scam schemes and providers as legitimate entities.
5. CLAIMS MANAGEMENT COMPANIES Making cold calls to claim savers have been missold a pension, then asking for an advance fee to take your claim on.
6. EMPLOYER RELATED INVESTMENT (ERI) Breaching restrictions against employers diverting employees’ pension payments to invest inappropriately in their business, leading to losses to savers.
7. HIGH FEES Imposing excessive fees through unnecessarily complex business structures.