Approach with caution – scams an increasing concern
Scammers are relentless in their efforts to trick savers out of their pension cash, and it?s recently emerged that their tactics are continuing to increase in sophistication. Thieves are increasingly exploiting grey areas of the law and encouraging people to move their pension funds into investments that are completely legal, but totally inappropriate.
These investments often have high charges, are dangerously risky, or incapable of providing the level of income they claim to be able to deliver.
PLANS TO CRACK DOWN
Over £43m in retirement savings has been lost to fraud since the introduction of pension freedoms. Concerns have been raised in parliament, and the Work and Pensions Committee has held an inquiry that, amongst other things, heard evidence as to what might be done to prevent these potentially devastating losses. The Financial Conduct Authority has promised to publish a strategy to tackle the problem.
The much-anticipated ban on pensions coldcalling that will also include texts and emails is likely to go before parliament in the first half of 2018. Companies that do not have prior permission to contact consumers, or do not have an existing client relationship with them, will face fines of up to £500,000.
SIGNS TO LOOK OUT FOR
In the meantime, everyone needs to be aware of the signs to be aware of. The Pensions Regulator?s advice is to hang up on anyone who calls out of the blue to discuss pension opportunities, and recommends that savers who are thinking of dealing with any pension organisation should check that they are regulated by the Financial Conduct Authority.
Signs that a cold-caller could be part of a scam and trying to trick consumers out of their pension savings include suggesting that what is on offer is only available to sophisticated investors, and will only be available for a short period of time, meaning that decisions must be taken quickly. It could happen to you, so equip yourself with the knowledge – be scam savvy.