Be a Scamsmart Investor
Posted by siteadmin on Monday 8th of May 2017.
For many people, their pension pot represents a major asset. Pension scams can cost people their life savings, and with little time left to rebuild their pension savings, can leave them facing a bleak retirement.
Following the recent surge in fraudulent cold calling, the government has launched a consultation over the banning of pension cold calling. Research by the Money Advice Service suggests that there could be as many as eight scam calls made every second.
The Chancellor, Philip Hammond, is also considering giving pension firms greater powers to block suspicious transfers when they fear that clients have been targeted by fraudsters and are about to move their money into unsafe investments. The outcome of the consultation may include the recommendation to ban any cold calling in relation to pension products and develop greater powers for providers to block suspicious fund transfers.
The extent of the problem
It’s estimated that around 11m pensioners are the targets of unscrupulous cold callers every year; however, the true extent of pension fraud is unknown. It can take time before people realise that the investment they have been sold is worthless and that they have been scammed.
Scammers are constantly coming up with new ways of duping people, so whilst a ban on cold calling won’t be foolproof, it will make people more fraud-aware and criminalise those who make the calls. Pension providers have suggested that the consultation should also cover frauds perpetrated via emails and texts.
The consultation process is underway and the results are eagerly awaited. With this in mind, the Financial Conduct Authority (FCA) offers some advice on how to be a ScamSmart investor:
1. Reject any unsolicited contact about investment opportunities
Use the benchmark – if it sounds too good to be true, then it probably is.
2. Check the FCA Warning List
And the Financial Services Register to determine if those asking for your money are legitimate.
3. Get impartial advice
Seek advice from someone unconnected to the firm that has approached you.
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.