Over-fifties living in Northampton are being repeatedly contacted with cold-calls and emails offering fraudulent pension opportunities, according to new evidence from Citizens Advice.
The charity has found that scammers use various tactics to target victims, such as convincing them to move their pension pots into fraudulent schemes, pretending to be their employer or pension provider, and offering bogus ‘free’ financial advice.
David Massarella, is a Pension Wise specialist, who offers appointments from the Citizens Advice offices in Mercer’s Row.
He said: “People are being targeted again and again with bogus investment offers or fraudulent pension opportunities.
“Pension and investment scams are particularly dangerous as they can destroy people’s entire pension pot, leaving them with little or no savings for retirement. “We will be monitoring pension scams closely in order to track how they are evolving, and warn consumers what to look out for.”
Some current scams run so deep that the problems with investments might not become apparent until years later, when the victim tries to access the money.
John Stimpson, also a guidance specialist, said: “One man invested all of his modest pension pot into a scam investment, believing the marketing material that said it was a low-risk investment with guaranteed returns.
“In fact the Financial Conduct Authority has named such schemes, amongst other unregulated investments, as ‘high risk’ and could be used by scammers targeting people’s pensions.”
Emerging scams seen by Citizens Advice include:
Unspecified financial products: People are asked by fraudsters to give them access to their pension pots, who would then invest them into financial products on their behalf. Despite offering a high rate of return, scammers were unable to explain what the investments might be.
Free pension reviews: People are texted or cold-called with offers of a free pension review. The caller then asks to visit the person in their own home, bringing paperwork that would allow them to get access to their pension details. One man responded to an internet ad for a free pension review, filled in his details, and was visited by someone claiming to be an Independent Financial Adviser who couldn’t describe any investments.
Investments for pension cash: People are approached with offers to invest their pension cash into products such as property overseas or fine wines. One investment scam featured two salesmen - one who visited the potential customer to get access to his pension details, and a second to encourage him to invest his pension and any other savings into property in South Africa.
Common signs of a pension scam
- Pension help for free: an offer of help with your pension, such as free review or help tracing a lost pension
- High rates of return: any promotion offering you a much higher rate of return than other investors
- Time pressure: if you are told you must give your details within a short time frame or sign paperwork from a courier
- Pension liberation: an offer to help you access your pension before age 55
How to avoid being scammed
- Never be rushed into making a decision
- Check if the company contacting you is regulated by the Financial Conduct Authority (FCA)
- If you are unsure, contact The Pensions Advisory Service on 0300 123 1047 or contact Citizens Advice on 03454 04 05 06
- Look at the FCA’s Scamsmart warning list, which gives the names of investment schemes that are known scams. www.fca.org.uk/scamsmart
- If you have already accepted an offer you think is a scam, report it to Action Fraud