10th April 2015
Fraudsters are already homing in on pension cash just five days into the new freedoms, and there are five main scams they are using to try and part you from your savings.
The Citizens Advice Bureau has revealed a the top five scams it has identified and warned retirees to double-check the legitimacy of people who call them out of the blue offering too-good-to-be-true opportunities.
1. Moving savings into a new ‘pension’
Pensioners are charged high fees to move their pension but either nothing happens or the money is moved and then goes missing or is transferred to a fraudulent scheme.
2. Fake investment opportunities
Pensioners are conned into taking out their pension cash to place it in a one-in-a-lifetime investment. These investments often include esoteric items like wine or ‘revolutionary’ new products or projects. Be especially wary of overseas property investments.
3. Offering free ‘advice’ and support
Scammers offer ‘free’ pension advice or a review in return for a fee. The reviews are often just to gain personal details and passed on to other scammers. The government’s free Pension Wise guidance service can offer help to retirees.
4. Charging a fee for dodgy service
Dodgy services, much like the review scam, are paid for but never materialises or does happen but is very expensive and/or not in the consumers best interest.
5. Getting personal information from people
These scammers contact people by email or over the phone and use ‘phising’ techniques to get people to hand over personal details such as national insurance numbers and bank account details.
Sometime they will use infoamtion to get a person’s employer or pension provider details.
CAB found those aged 65 and over are twice as likely to approach the organisation for help with a fraud or scam issue.
Of the scams that CAB has dealt with two-thirds come from cold calls.
Gillian Guy, chief executive of CAB, said: ‘Scammers see pensioners as a prime target. There are many people looking to benefit from the new pension rules, including scammers.
‘Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots. Anyone who feels unsure about a cold call or dodgy offer they have received about their pension should let someone else know, and report it to the authorities.’
Pensioners hit by scammers
* One man put £85,000 into a retirement benefit scheme promising 3% return on his investment after he received a call about moving his frozen pension.
He started to worry about his money when, despite being promised a letter every year, he didn’t receive any documents.
* Another 79-year-old was called about an opportunity to invest in wine, leading his to withdraw all of his £7,000 savings. Later the company sent a letter requesting another £5,500 and saying that if he did not invest extra he might lose the money he had already invested.
* One women received a call claiming to help check she was receiving all the pensions she was entitled to. Having provided some detailed to help with the ‘free’ process she found an attempt had been made to take money from her pension fund.