Pension transfer scams feature unfortunately often in the financial news, with continuing reports of thousands of investors across the UK losing hard-earned retirement savings after purchasing products or services from unauthorised pension firms. Recently, the financial media has largely focussed on the positive measures put in place by the Financial Conduct Authority (FCA) to reduce the risk of pension transfer mis-selling and secure retirement savings from unregulated financial advisers. However, details of a new pension transfer scam have surfaced, where pension holders sustained average losses of up to £91,000.
Outlining the Pension Transfer Scam
According to Action Fraud, the UK’s national fraud crime reporting centre, this latest scam begins with sales personnel contacting potential clients via a cold call, a text or an email, or even social media. They use high pressure sales tactics to introduce customers to an investment product with high marketing returns, representing significant pension savings over a shorter period. Often, these scammers will offer a free pension review as an additional bonus.
In the unlucky few cases, money transferred from existing pension savings plans to these unauthorised pension firms is stolen outright. Even in instances where the pension transfer is conducted, and cash is re-invested into the recommended product, the advertised rates of return are unlikely to materialise. This is because the product is typically an alternative investment that is unsuitable for retail investors due to the high levels of risk associated with that market. Sustainable plantations, offshore property, and green energy schemes are among the most common high-risk investments that are regularly mis-sold to retail investors.
Many victims of financial scams do not come forward due to a lack of understanding about liability in the financial sector. Yet Action Fraud claimed that scammers managed to rake in a sum of over £23 million from 253 claimants in 2017 alone. This represents average losses of up to £91,000 per person. The FCA reckons that as many as 107,000 people aged between 55 – 64 could have been scammed of their pension savings in the last year.
These astonishing figures have prompted unilateral action across the financial sector, with numerous organisations encouraging pension holders to be vigilant and ensure that any organisations they are dealing with are regulated by the FCA. A proposed ban on pension cold calling is expected to come into play this autumn, but in the mean-time pension holders are still at risk from scammers.
Mis-Sold Pension Transfers with Money and Me Claims
The FCA and The Pensions Regulator have recommended several simple steps to protect your pension savings from scams. These include rejecting any unexpected pension offers made online or over the phone, and to check that any agency you are dealing with is regulated by the FCA. If you believe that you might have already suffered as a result of pension scammers, it is not too late to try to recover your losses.
Money and Me Claims is a specialist financial claims management company established to help you seek compensation for mis-sold financial products and services.
If you would like any more information about your potential pension transfer claim, please do not hesitate to contact us.