Action Fraud have released a statement saying that organised criminal groups led by married couples and families are scamming pension holders to the tune of millions of pounds.
Action Fraud say criminal investigations involving regulators, government agencies and police forces are currently ongoing into a number of these gangs. In some cases, the fraudsters have hired fraudulent financial experts with pension experience to run large-scale scams. The fraudsters would not be able to run these scams without the insider knowledge of fraudulent experts.
Victims report receiving cold-calls, offers of free pension reviews and promises of high returns. However a ban on pensions cold calling came into force this year and firms who break the rules will face fines of up to half a million pounds.
The Pensions Scams Industry Group also reported that pension providers are identifying more suspicious transfer requests than ever before and alerting members to what they believe could be scams.
Nicola Parish, TPR’s Executive Director Of Frontline Regulation spoke to Action Fraud: “Trustees and administrators play a key role in preventing members from falling victim to scams by identifying suspicious requests early. The better they are at spotting the signs of a scam, the quicker members can be warned and we can investigate. Working together we can target those trying to plunder people’s pension pots and bring them to justice.”
Minister for Pensions and Financial Inclusion, Guy Opperman spoke to Action Fraud: “Scammers who siphon off savings built up over decades are the lowest of the low. When you’ve worked hard and done the right thing, you don’t expect a con artist to rob you of the future you deserve. We’re determined to put a stop to the misery these callous crooks inflict, which is why we’re supporting the work being done to stamp out pension theft.”
How Pension Review Scams Work:
Investors are often called out of the blue. Scammers will contact you via email, post or cold-call you. Free pension reviews are designed to persuade you to move money in your pension pot, into a high-risk scheme. Then, one of a few things may happen, depending on the type of scam. Some of these investments are outright scams and the fraudsters simply pocket your pension and run, whilst others may invest in unusual schemes, such as overseas property, forestry, storage units, care homes, biofuels or businesses you may not be familiar with. You may be promised guaranteed returns, or a cash sum to tempt you. And as they are promoted as long-term investments, it could be several years before you realise something is wrong.
Cold calling is currently, by far, the most common method used to initiate pension fraud. The issue is so serious, the government has announced new measures to protect people from pension scams. These actions, once in place, will include a ban on cold calling in relation to pensions, tightening of rules to stop scammers opening fraudulent pension schemes, and tougher action to prevent the transfer of money from occupational pension schemes into fraudulent ones. The ban on cold calling pensioners was due to come into force this summer but has been delayed until Autumn, according to the government.
Regulators recommend these simple steps to protect yourself.
Do not trust unexpected pension offers, whether online, on social media or over the phone.
Check who you are dealing with before changing your pension arrangements. Contact the FCA if you are unsure and before you enter any agreement
Do not be rushed into making a decision about your pension
Get impartial advice and information
If you think you have been a victim, report it immediately.
Visit www.fca.org.uk/ScamSmart to understand the signs of a scam if you are considering transferring your pension. If you think you have been a victim of a pension scam, report it to Action Fraud online at https://www.actionfraud.police.uk/ or by calling 0300 12302040.