For many people, investing money into a pension makes sound financial sense.
After all, who wouldn’t want a guaranteed income once they retire? It offers a layer of financial security that can keep people living a comfortable lifestyle long after their careers in the world of work have finished.
But unfortunately, as with virtually anything involving large sums of money, there are many nefarious groups and individuals out there who’ll want to get their hands on it - and they don’t care whether you’ve scrimped, saved or worked a lifetime to get it either. Pensions are big business, but not all of them are legitimate. Welcome to the dark world of pension scams…
HOOKING YOU IN
There are many different techniques that fraudsters will use to entice people into funnelling their money into phoney pension schemes, but depressingly, the outcomes for the unwitting victims are always the same: their money usually disappears into the pockets of the fraudsters, never to be seen again.
Pension scammers will often look to get their victims to either start paying into a phoney pension scheme or divert them from their regular pension providers by making grand claims or offers about their own ‘schemes’; including:
You can access your pension funds before you’re 55
You’ll double, triple or quadruple your investment
Be offered alternative ‘once in a lifetime’ investment opportunities that’ll give astounding returns compared to a standard pension
Even offer cash incentives upfront to join.
These types of hook are nothing new; but the sophisticated methods being employed to support them certainly are. Forget the image of traditional door-to-door con artists: these scammers have gone corporate – with many having slick websites, fake marketing materials and even fake offices – you’d sometimes be hard pressed to tell the difference.
So, with fraudsters now masquerading as the real deal, how can you spot the dodgy deals and protect your staff from losing their hard-earned cash? Here are some quick sure-fire tips that’ll help protect them…
1: AVOID BOLTS FROM THE BLUE
Scammers will often contact their victims totally out of the blue to try and hook them in. This isn’t standard practice for legitimate pension providers and is often the very first indication of a con. It may also be the case that you can’t contact them directly, with only a PO Box address as a main head office or just a mobile contact number. Stay safe; encourage your staff not to give any details and simply hang up!
2: DON’T BE PUT ON THE SPOT
A common trait of con artists is to force their victims into making a quick decision or pressure them into an outcome - there are even instances of fraudsters couriering documents to their targets in order to hasten the deception! Never make an important financial decision on the spot, and if someone is pressurising you or your staff into a choice, simply put the phone down or walk away.
3: DON’T BELIEVE THE HYPE
If your staff are being offered unbelievable rates of return on their investment that have zero to no risk or simply sound too good to be true, they probably are. Which leads nicely onto…
4: SEEK INDEPENDENT ADVICE
There are plenty of legitimate FCA approved firms out there who can assist with financial and investment advice. If you want to ensure they’re genuine, you can check if a business is FCA-approved via their register or if they’re on their warning list.
5: REPORT IT
If you think you or your staff are being targeted by a scam, report it to the FCA via their online reporting form or to Action Fraud. If you have any questions or doubts about an investment, talk to the experts at The Pensions Advisory Service via their website or their dedicated helpline on 0300 123 1047.