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Cost of living crisis may make pension consumers more vulnerable to scammers

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Money worries and a lack of confidence in pension savings may tempt consumers to look for alternative investments and higher returns leaving them vulnerable to scams, according to the City watchdog, the Financial Conduct Authority (FCA).

What is your pension worth?

The FCA recently surveyed more than 1000 people aged 40+ who hold workplace or private pensions. Their findings suggest that a quarter would withdraw pension savings early to cover cost of living expenses. In a cost-of-living crisis, this is perhaps not surprising – some people will also have to work longer, as they simply can’t afford to retire.

There’s a saying that ‘desperate times call for desperate measures’, but the FCA is advising care. Over half of the people surveyed admitted to not knowing how to grow their pension pot and 38% said they didn’t really understand how pensions work. Sadly, this means that opportunistic scammers are never far away.

44% of those questioned said they would take up the offer of a free pension review – a popular tactic used by scammers to get your attention and tempt you with their sales pitch.

  • If you were contacted out of the blue by a financial adviser, would you trust them?
  • What checks would you do to ensure they were trustworthy and ran a legitimate business?

Investment scams are more sophisticated than ever, with fake websites, convincing social media, products and client testimonials being all too common. Some even impersonate legitimate companies, with very similar company names, website addresses and contact details.

Commenting on the research, Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said:

“The rising cost of living is affecting people at all savings levels, and pension scammers are taking advantage of this. Pension scammers are tricking victims with false promises of a better lifestyle in retirement, more money to support a better life in hard times…thousands can disappear in seconds, but this time the consequences can be devastating ones.”

He goes on to recommend that anyone considering an investment should visit the FCA’s dedicated ScamSmart pages.

There are a number of things you can do to avoid the scammers’ tricks:

  • Watch out for unexpected text messages or calls – it’s probably a scam.
  •  Do your research – check online for details of firms on the FCA’s warning list – this includes firms that aren’t authorised to carry out financial advice work or have had complaints against them.
  • Double-check website addresses, company names, social media and contact details on the Financial Services Register. They may appear similar but won’t be from the genuine company.
  • Take your time – don’t feel rushed to make a decision. Scammers often use pressure tactics such as ‘time-limited’ offers.
  • If an investment seems too good to be true, it probably is!

There are many examples of unregulated pension and investment scams that the Financial Mis-selling team at TLW Solicitors see regularly, including:

  • Off-plan property
    (often abroad, such as hotel developments)
  • Storage pods
  • Carbon credits
  • Biofuels
  • Green oil
  • Farmland
  • Car parking spaces
  • Listed building development projects

Commenting on the FCA research, Head of Professional Negligence at TLW, Sarah Spruce, said:

“The FCA survey findings are disappointing but not surprising. Our specialist team are seeing increasingly elaborate and convincing scams from fraudsters preying on victims of the current economic uncertainty.

People affected by scams in this way are often embarrassed about being the victim of fraudsters and often feel that there is nowhere to turn. However, there is help available. The team and I would urge anyone who has lost money in this way to get in touch. We can advise you about seeking a refund and help you through the process of making a claim for compensation.”

TLW Solicitors specialist pensions mis-selling team were recently featured in BBC One’s 10 part ‘Northern Justice’ programme. The episodes featured TLW lawyers Emily Barr and Alex Laws pursuing pension mis-selling cases on behalf of their clients and helping them recover substantial compensation enabling them to get their retirement plans back on track. Full details about the episodes that the team featured in can be found here.

If you feel that you or a loved one weren’t given the right pension or investment advice or may have been the victim of a scam, please contact us and we can talk through your options.

Please call us on 0800 169 5925, email info@tlwsolicitors.co.uk, or use our online forms below and our team will contact you for an initial, no-obligation discussion.

It is important to get advice as soon as possible as strict time limits can apply.

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