Suspected firms who advertise and arrange pensions are offering investments in alternative commodities such as hotel developments or property in Cape Verde, and operate as unregulated collective investment schemes.
Often, the cold calling ‘pension companies’ involved are neither regulated nor qualified to give financial advice and classify themselves as a ‘trustee’, ‘consultant’ or an ‘independent advisor’ and offer exceptionally high return rates for investors.
Some victims have signed documents that authorises a limited company to be set up using their personal details, including utilising a Small Self–Administered Scheme (SSAS).
Whilst SSAS accounts and limited companies are essential for legitimate schemes, the fact that victims are unaware that this will happen suggests that the scheme may not have been fully explained to them, increasing the likelihood that there may be an element of fraud involved.
Recent research released by Citizens Advice revealed that almost nine in 10 people miss common warning signs of a pensions scam – such as unusually high investment returns, cold calling and offers of free financial advice – despite feeling confident that they can spot fraudsters’ tricks.
How to protect yourself:
- Ensure that you request that the risks and growth rates are explained and that you fully understand them before transferring your pension.
- Check whether the pension arrangement company is registered with the FCA. Registered companies can be checked using the FCA register online.
- If you’re thinking about how to invest your retirement savings, follow these 10 steps to protect your pension.
- Remember that if the offer seems too good to be true, then it generally is.
To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.