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Pension scams

Remember if it seems too good to be true….it probably is

It is important to understand that scams relating to pensions are becoming smarter, more common, and more advanced, which can make them harder to spot. Scammers are using more methods to initiate contact, with an increasing focus towards social media, as well as traditional approaches such as cold calling.

Websites are being made to look more legitimate, including fake testimonials, awards or qualifications and correspondence will have fewer mistakes than in the past. You might also speak to someone on the phone who seems knowledgeable, friendly, and trustworthy.

The bottom line is that pensions continue to be a big focus for scammers and their approach has become more professional. 

How to spot a scam and what are the red flags

  • Have you been cold called?

    It is illegal to cold call someone about pensions, so if you get an unexpected call, it could be a scam so do not be afraid to hang up. If you do receive a call that you believe is a scam, do not give them any personal details. You can check their number by looking online to see if other people have reported them and left feedback.

  • Have they offered you a free pension review?

    Whilst this may sound useful and a low-risk option, it is a common tactic used by scammers to influence your decision. Be careful and do research on the company or adviser.

  • Are they registered with the Financial Conduct Authority (FCA)?

    If you are thinking of transferring your pension, you will most likely be required to take independent financial advice. We always recommend you check the FCA’s adviser register. If the financial adviser is not registered, then they do not have permission to give you financial advice.

    A link to the FCA financial adviser register can be found at the bottom of the page.

  • Have you seen an advertisement online, or have they contacted you via social media?

    Social media sites generate revenue through advertisements. You may be familiar with ‘ad posts’ that will look like a normal post. Social media sites use an algorithm (usually consisting of age, location, and browser history). This provides tailored advertisements for you, which unfortunately can allow convincing posts that could potentially be a scam.

    Be aware of any posts that promise to:

    • To liberate your pension
    • One-off investments
    • An advance on your pension
    • Access your pension pot early
    • A free pension review

    There are many more examples, but the key message is that social media may provide you with a tailored advertisement designed to make you interested is a red flag and could potentially be a scam. 

    Please be aware that you may also be contacted by an unknown contact. This is because a potential scammer only needs your phone number to start a conversation. If you can, report any numbers or contacts that you think are suspicious.

  • Can you contact the adviser?

    You should be able to find their address, telephone number and registered offices by using a search engine. This can be checked against the correspondence you have received, or against the FCA register. If the details you find, do not match, this could be a red flag.  

  • Have there been complaints about the company?

    If there have been complaints about the adviser, firm or investment you should always do a thorough search for as much information as possible. A good starting point is to do a google search and look out for:

    • What is their star rating on google reviews?
    • What is the general feedback from other people?
    • Check on forums and social media for reviews and complaints

    If you do find any complaints about the company, this could be a red flag, so carefully consider what the complaints say.

  • Have you been pressured to make a quick decision or told you cannot call the adviser back?

    This should be seen as a red flag. Transferring your pension is a decision that requires time to consider. This approach is used to pressurise you, and therefore reduce the time you to make an informed decision.

  • Are they claiming a high rate of return on the investment but still claiming that it is a low-risk product

    When discussing a potential investment, an adviser should highlight that any investment can go up and down in value. If the adviser is promising you a high return and at the same time being a low-risk investment, this should be seen as a red flag. Make sure you investigate the company fully before proceeding further.

How to protect your savings

You can use a financial adviser to help you make the best decision for your own personal circumstances. Make sure they are regulated by the FCA and never take investment advice from the company that contacted you. This may be part of the scam.

If you are over 50 and have a Defined Contribution (DC) pension, Pension Wise offers appointments to talk through your retirement options. If you have a Defined Benefit (DB) pension, or are under the age of 50, you can also contact Pension Wise for any general queries you might have.

Remember if it sounds too good to be true it probably is

You can report an unauthorised firm or scam to the FCA using their online reporting form or by calling 0800 111 6768.

If you suspect a scam report it to the National Fraud and Cyber Crime Reporting or by calling 0300 123 2040.

If you do decide to transfer your benefits, the Trustee needs to check certain things about your adviser and the arrangement that you want to transfer to. These checks have been implemented to protect your benefits from scammers. You can read more about the checks on our ‘Trustee checks for transfers’ page. If the Trustee has any concerns, the transfer request may not be processed.

If you have previously been scammed, be on guard against recovery or secondary room scams, where fraudsters will approach you and offer to help you get your money back in return for a fee.

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