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How to tell if you’ve come across a pension scammer


Regulators warned that last year alone, pension fraud victims lost an accumulated amount of over £23m. Now, newly published figures claim that pension scam victims are losing an average of £91,000 each.


It’s safe to say that almost no facet of life is, well, safe from annoying scammers. The scam industry is a colossal one that feeds on the naivety of unsuspecting people willing to part with cash after being coaxed out of it. The pension process can be just as vulnerable to malicious infiltration as any other that involves the transfer of large amounts of money.


The £23m figure came from both the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) and referred to stolen pension funds in 2017. They have warned pension holders to “be on their guard” for potential fraudsters. These same regulators have also launched a joint TV advertising campaign in order to raise awareness about scammers and warn victims of pension fraud. Life savings are on the line.


Financial scams of any kind range from being blatantly obvious to fairly difficult to spot. The best (or should I say worst) fraudsters can be surprisingly knowledgeable about finance. Some even go the distance and have credible-looking websites, testimonials (all fake of course) and other convincing elements that can make them hard to distinguish from authentic parties. If your current pension provider is not regulated, this magnifies the potential for fraud and you should consider your position very carefully.


Here are some tell-tale signs that you’re most probably being coaxed by a pension scammer and how you can best avoid such situations.


They cold call you

TPR’s executive director of frontline regulation, Nicola Parish, said: “If someone cold calls you about your pension, it’s probably an attempt to steal your savings. Our message is clear – hang up and report it.”


The fact that someone is calling specifically to ask you about important decisions regarding your pension, should already raise red flags. Legitimate pension officials do not follow this process. Keep in mind that it’s crucial to exercise caution and seek independent guidance or advice before making important financial decisions, it definitely shouldn’t be done over the phone.


In fact, experts warn that all unsolicited approaches whether by phone call, text message, email or in person are “tell-tale” signs of a con, especially if the firm contacting you doesn’t allow you to call them back.


It sounds too good to be true

Another common trait that scammers have, is that they will try to peak your interest with fantastic deals and opportunities. They may claim to be able to somehow unlock money from an individual’s pension, which would normally only be possible from age 55 and onwards. Other claims revolve around “tax loopholes”, “extra tax savings” or supposedly low-risk deals that “offer high rates of return on your investment”. It goes without saying that these suspicious claims should all be taken with a pinch of salt (or a handful of salt).


Always be thorough

Pension scammers aren’t new to the financial world, they’ve been preying on people’s savings for years. The scariest part is that they’re getting better at it, progressing to methods that are more sophisticated. It’s imperative that the tools and methods we use to protect ourselves get more sophisticated as well.

Scammers often reinforce their false claims with official-looking authorisation by regulators in order to gain your trust. In some instances, they state that they don’t need to be regulated because they aren’t providing the advice themselves.


Some might even claim that they are acting on behalf of a government agency. In order to blend in with more authentic financial sources, they can also be found offering services which reputable firms also provide such as ‘pension reviews’. They also often push unusual or complicated structures, using high-pressure tactics like ‘limited time offers’ to get you to break.


Always be thorough with your background checks. Call as many sources as possible to verify that these contacting parties are legitimate. If you can’t gather enough details about them, reject their offers. In fact, to be even safer, check the financial regulators’ registers to make sure that anyone offering you advice or services is authorised. If someone isn’t listed in these databases, the smartest thing to do would be to discontinue contact.

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© 2019 by Mana Strategic Consulting.