Pension scam alert: 7 hoaxes that are ‘ruining people’s lives’ | Personal finance | Finance

The Regulator of Pensions (TPR) has unveiled a list of seven schemes that scammers use to trick people into handing over their money. Nicola Parish, Executive Director of Frontline Regulation Criminals at TPR, said: “Criminals who steal people’s pensions are ruining lives. It’s plain and simple.

“And as the regulator of workplace pensions, our primary focus must always be to ensure that pension money for savers is protected now and in the future.”

“Scammers use psychological deception and professional-looking materials to cheat people with their savings.

“If they can, they will take every penny and devastate savers’ financial futures.

“That’s why we’re committed to doing everything we can to educate savers about the risk of scams and to help stop scammers in their tracks.”

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Sneaky tactics used by scammers to convince victims to hand over their money include:

  • Investment Fraud – Misrepresenting high risk or fake investments to savers
  • Pension Liberation – Entice savers to access their pension pots under 55, unaware that they will receive a tax burden or may engage in tax evasion
  • Fraudulent Pension Plans and Providers – These Fake Plans Don’t Exist or Exist but Commit Fraud
  • Clone Companies – Fake Schemes and Suppliers Disguised as Legitimate Entities
  • Claims management companies – This includes cold calls that claim someone has been wrongfully sold a pension and then ask for an upfront expense to start a claim
  • Employer-Related Investment (ERI) – Violation of ERI restrictions when an employer diverts its employees’ pensions into inappropriate investments, resulting in losses to savers
  • High Fees – Excessive fees often layered on top of unnecessarily complex business structures

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The TPR unveiled a strategy to better protect savers from scams, by educating people, improving industry practices and arresting and punishing fraudsters.

The regulator has warned that too many schemes have poor advice and administration, leaving people’s savings exposed to fraudsters.

Ms Parish said savers could be particularly vulnerable with the cost of living crisis and the impact of the coronavirus pandemic.

She said: “The industry must act to achieve good results for savers by being proactive in their retirement scam warnings, innovating in improving protection standards and reporting potential crimes to the authorities.

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“Building on this, we and our partners in regulation, law enforcement and government must also play our part – ensuring that schemes are up to standard and working together effectively to protect the savers’ money.

“All of us have suffered lately due to the Covid-19 pandemic and cost of living pressures.

“It’s times like these that we know savers could be vulnerable to approaches from retirement scammers.

“That’s why now is the time for industry, regulators and government to do more and really work together to put savers at the heart of everything we do.”

The regulator has warned that too many schemes have poor advice and administration, leaving people’s savings exposed to fraudsters.

A PensionBee study shared with found that only 57% of victims fully recover what they lost.

Phishing and spoofing were among the most common schemes used by scammers.

Romi Savova, CEO of PensionBee, told “It is a sad reality that sophisticated criminals are preying on savers.

“Savers are simply looking to get the most out of their money in a confusing economic climate.

“Scammers can target anyone, so it’s crucial that all consumers remain vigilant when sharing personal information and refuse to engage with anyone who contacts them out of the blue.”

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