The Pensions Regulator (TPR) launches new scam-fighting strategy

The Pensions Regulator (TPR) has launched a new scam-fighting strategy in relation to concerns over the rising cost-of-living.

The increasing cost-of-living may result in more vulnerable people becoming victims of fake promises at the hands of pension scammers. TPR said that this decision is made primarily, although not solely, in relation to seven kinds of pension scams.

TPR has published a list of seven key pension scams to watch out for. Their concern is that savers may be lured by offers to access their pension savings early to cover essential household bills or be attracted by fake investments offering high returns that never materialise.

TPR’s seven pension scams to avoid

1. Investment fraud – Misrepresenting high-risk or false investments to savers
2. Pension liberation – Misleading savers into accessing their pension pots before the age of 55, which incurs hefty tax charges – even if the money has already vanished in a scam
3. Scam pension schemes and providers – Setting up schemes to deceive victims that don’t exist, or exist but are committing fraud
4. Clone firms – Disguising scam schemes and providers as legitimate entities
5. Claims Management Companies – Making cold calls to claim savers have been mis-sold a pension, then asking for an advance fee to begin a claims process
6. Employer Related Investment (ERI) – Breaching restrictions against employers diverting employees pension payments to invest inappropriately in their business, leading to losses to savers
7. High fees – Imposing excessive fees often layered through unnecessarily complex business structures.

Pension scams can decimate future retirement plans and leave savers tens of thousands of pounds out of pocket, and in some cases it is impossible to claw all the money back.

Simple steps to avoid becoming a victim of pension scams

• Don’t engage with unregulated ‘advisors’

Although smart phones and social media are a strong weapon of choice for the modern day scammer, some will still appear on your doorstep. These types of scammers usually target older people as they assume they are more vulnerable.

Ensure that you only deal with FCA Regulated Advisors. This is extremely important as if you are advised to purchase an investment by an unregulated individual, you do not have any protection the FCA offers or any avenue of compensation.

• Be wary of promised sky-high returns and ‘guaranteed’ returns

When it comes to investments, nothing is guaranteed.

One key ingredient of a scam will usually be a promise of double-digit returns via overseas investments. If you are told that you can receive a 10% + annual return from a hotel room in Spain or wind turbines in Holland, approach with caution.

It’s common for scammers to market investments in an asset that does not exist or has not yet been built.

• Take your time and don’t rush any decisions

Do not be forced into making a decision that you are not comfortable with. Your pension could be the most valuable asset you own so you should choose to invest this wisely.

If you are ever unsure, you should check the FCA’s Smart Scam Website for their scam-fighting strategy, or seek advice from a regulated financial advisor before making any important decisions.

Oakwood Solicitors Ltd specialises in Financial Mis-selling claims. We have a Financial Litigation team dedicated to assisting clients who have lost money as a consequence of negligent advice in relation to a financial product such as a pension or an investment.

If you believe you have been mis-sold a pension or investment contact Oakwood Solicitors today. After you provide us with some information relating to your pension transfer we will advise you if you have a claim. There is absolutely no obligation to proceed.

Further reading

Mis-sold pensions – Oakwood Solicitors

Mis-sold investments – Oakwood Solicitors

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