Scams related to free pension reviews

Pensioners Lose Savings To Fake Investment Schemes

Most pensioners in the country get messages and calls about unapproved free pension reviews. These firms claim they do not need government authorisation to function or provide the reviews, or they say, "We are a sponsored agency working on behalf of a government." 

The fraudster may know the financial markets well and have credible websites, reports, testimonials, and material to make the offer look consistent. 

However, they aim to persuade customers to transfer funds into another account. Thus, they steal people's savings while knowing their intentions may not be easy initially.

How Does It Happen?

The fraudster offers free financial advice and investment opportunities into projects in renewable energy bonds, carbon credit, forestry, storage units, overseas properties or other such options, which can fetch 10-15 per cent returns. 

They promise to deliver all the paper through post/courier and claim the projects are designed and managed by experts in their fields. They call or email the person and ask the victim to transfer funds into SIPP – the tool people can use to manage, handle and amend their assets. 

It is offered for a huge fee compared to a personal pension account and is susceptible to risks due to higher flexibility. 

They offer a discounted opportunity that can deliver over 10 per cent returns and provide guaranteed high returns in time-limited deals [or money-back guarantee]. Cloning is one of the methods used by scammers to appear reliable. They create clones of the reputed regulated firms and pretend to be them. 

Policy Amendments 

In April 2015, the government provided more freedom to people over 55 to withdraw money and invest it in various funds. The victims said they became interested in the offers to get early access to their pension pots and discussed pension plans with an anonymous cold caller.   

How To Protect Yourself?

• Always reject/refuse high-return deals offered online on social media and through phone calls. Do not answer calls claiming to get you very high returns concerning your pension reviews. 

• Do not get free professional advice on unknown calls or emails. Do not respond to emails that send adverts regarding huge returns through new investment plans.

• Do not be pressured into making a decision. Always seek guidance from a reputed government-backed agency. Do a complete research and get impartial advice from an independent agency or an expert.

• Always check the credentials of the firm offering a pension review plan. Check the FCA register or call the official numbers to know if the deals are authorised.

• If you have already invested in a transformed arrangement, get advice from an authorised registered agency. You can get the list of registered firms online and contact the FOS for a solution if you suspect a scam.

• Report your issue to the consumer helpline and fill out the registration form. Avoid all forms of follow-up calls/emails with the criminals.

• The government is preparing to improve the security of the funds by giving new powers to pension managers, who can block a transfer request from the pension account if they suspect a scam.  

• They also plan to restrict the fake return claims such firms advertise and impose a ban on terms/words used to make impractical claims. 

• They are also making rules to enforce identity verification and submission of legal data to prove the institution's identity. In addition, there are recommendations to introduce stronger legislation to hold the tech giants responsible for delivering banned adverts.