Pension investment scam case study

We are also providing some information here on some of the types of scams and how to avoid falling for the techniques that the scammers use to trick people into parting with their money.

A pension is something that many work their entire lives for and it often forms the basis of their lifestyle in retirement. April 2015 saw the biggest overhaul of pension legislation in decades and gave millions of people greater access to their pensions.

Unfortunately with this greater access comes greater risk as many will be exposed to unsuitable, negligent or just totally fraudulent advice which, in a matter of minutes, could cost them what they have worked years to earn.

We have produced an infographic based on a real-life case example where our client lost thousands to a pension investment scam. The name of the client has been changed but this is representative of a real case.

Sadly this sort of thing is now commonplace and the amount of money lost in pension scams reported to the City of London Police doubled in 2015 compared to the figure in 2014:

Figures from the City of London police show £9.1m-worth of scams were reported between April and August 2015, up from £4.5m in 2014.

Src: moneymarketing.co.uk

Our infographic focusses on a case where the “investment” was into an off plan property development abroad that tuned sour but there are many other examples of “investments” where people have lost out financially such as:

Green Oil
Carbon Credits
Storage pods
Foreign car parks
Forestry
Off plan property developments
Wine
Unquoted shares
Gold bullion
Third-party loans
Unregulated collective investment schemes
Footballer’s economic rights
Vintage cars
Stamps
Art
Antiques
Intellectual property

It is important to point out that the above are just examples of some of the kinds of investments may lead to scams, it is of course conceivable that they could be genuine investments.

Some of the main words and phrases to watch out for should you be approached by a cold caller, text or email offering a pension review or investment opportunity are:

“Legal Loophole”
“Sophisticated Investor”
“Free”

These phrases should ring alarm bells and encourage you to proceed with caution.

The purpose of this advice and the infographic is to help people avoid falling victim to this sort of scam in the first place but also to show that if this should happen, there may be options to recover some of the losses. TLW are specialists in this area and well versed at working with clients to recover money lost to this sort of pension or investment scam.

Important information to remember

Never deal with anyone who contacts you as a result of a cold call, spam email or text.
Many of the most successful pension frauds of recent years have utilised these methods to mass market and then subject those who reply to high pressure, aggressive sales techniques.

If it sounds too good to be true, it probably is.
Many fraudulent schemes or high risk investments promise high levels of returns, certainly much higher than you would receive from a traditional pension scheme. The reason for this is that either the returns are totally made up to lure people in or the investment is so high risk you have little chance of it ever working.

Beware of new or recently formed companies and make sure you know who the company is.
Most fraudsters will have only recently setup their company, again you can check the company history on the Companies House website. If the company is new or recently formed then despite what they tell you, they have no track record.