Call centre arrests as multi-agency operation steps up fight against pension liberation fraud.
On Wednesday morning (May 8) detectives from the National Lead Force for fraud entered a City of London based office housing up to 40 call-operatives, arresting three men and seizing computers and documents. At the same time the investigation team, supported by Police Scotland and SOCA, were arresting two men in Ayr and in Glasgow. Further arrests were made in Cheshire.
The investigation forms part of a wider cross government multi-agency operation against pension liberation activity, with thousands of people estimated to have released up to £400 million into high risk and non-existent investment schemes, many of which are based overseas.
Some of this money has been totally lost to fraudsters, with victims also being hit by significant tax and admin fees.
Action Fraud reports
The operation marked an important moment in what is the first major police investigation against suspected pension liberation fraud. It was triggered after the National Fraud Intelligence Bureau identified an increasing number of reports to Action Fraud of people losing their pensions after having been persuaded by the promise of better returns and tax free advances to release their savings.
In the past couple of years there has been a dramatic increase in members of pension schemes being approached to take a portion of their savings as cash before they reach the minimum pension age of 55.
Some of these funds are being completely lost to fraudsters and victims are also being charged with very high fees from the pension scheme organisers, with substantial tax charges of up to 55% being applied to monies transferred. This claws back pensions tax relief enjoyed on these savings.
Individual victims are known to have lost more than a million pounds with many having to face the future knowing future retirement plans have been ruined and they will be forced to work into old age.
New boiler room fraud phenomenon
Commander Steve Head, from the City of London Police, said:“Pension liberation fraud is the new boiler room fraud phenomenon as fraudsters seek to exploit new opportunities thrown up by the changing economic climate. The promise of maximising returns on your pension savings may seem to make good financial sense but the reality is you could be falling into a terrible trap which has the potential to destroy your retirement.
“People should think long and hard before releasing pension funds early and anyone who is cold-called or text messaged with this or any other type of investment opportunity should put the phone down and not reply to the message.”
The Pensions Regulator’s chief executive Bill Galvin said: “We have seen a dramatic rise in these sorts of arrangements in the last couple of years, with hundreds of millions of pounds involved and thousands of members affected. Of particular concern has been the significant increase in the targeting of individuals via cold calling and text messaging.
“We strongly urge individuals not to be taken in by such offers. If you take money from your pension before the age of 55 you stand to face substantial tax charges and will be poorer in retirement.”
Click here for more information on pension liberation fraud and The Pension Regulator's five steps to avoid becoming a victim.
If you have been a victim of this type of fraud, report it to Action Fraud by calling us on 0300 123 2040 or by using our online reporting tool.
