Pension scams are nothing new, but with the increase of access to the internet, there has been a rise in shady companies taking advantage of people with sophisticated scamming techniques.
Often these scams can look very legitimate and genuine on the surface, which is why many people have fallen victim to them over the years.
Losing your pension funds can be devastating for you and your future, so here are a few things that you can do to avoid a pension scam, and make sure you are only interacting with reputable companies.
Research the company
Researching the company is one of the simplest and best ways to ensure that you are not dealing with scammers.
Depending on where you live, see whether that company is a certified financial service provider in your country, for example, the Financial Conduct Authority (FCA). If they claim to be endorsed by the government, this should be a red flag. Always double check any credentials they claim to have.
You can also look for reviews and other peoples experiences, but be careful as some pension scammers will fake positive reviews as a part of their scheme.
Never transfer your money if you are not 100% sure whether the company is legitimate or not.
Random calls from a company
Many pension scammers will obtain your mobile number and contact you either through text message or a cold call. Always be wary of a call from random or private phone numbers claiming to be a reputable pension scheme, as this is not a legitimate form of contracting your business.
As a test, you can always ask to call them back. Many scammers will not want to share their contact details and will become defensive when you question them.
If the company is looking to put your pension savings into high-risk investment opportunities, this can be a sign of a scam. This often includes unregulated overseas investments that have no consumer protection.
They often promise a high return but do not discuss all of the risks involved for you and your savings. If they are guaranteeing a better return on your investment, this is something to be wary of.
The salesperson should not be rushing you through the process of transferring your pension. Often scam artists will create ‘limited time deals’ and request documents be sent through the mail to speed up the process.
This should be a warning sign of someone who does not have your best interest in mind. A reputable company will let you take your time in making a decision and be happy to guide you gently through the process.
They should also be providing you with proper documentation throughout the whole process.
Promises of cashing in your pension early
Many pension scammers will say that you can cash in your pension early, but not mention any of the additional taxes and costs involved with this. The damage this could have on your savings is devastating.
You should also be on the lookout for the following terms and phrases;
- Free pension review
- Pension liberation
- Legal loophole
- Savings advance
- One-off investment
While not all of these are an immediate indicator of a shady pension scam, they are definitely phrases you should be cautious of. Many scam artists will use them as a way to gain your trust and business.
If something seems too good to be true, it is always a good idea to investigate and get financial advice from multiple sources.
If you’ve suffered from a pension scam, get in touch with us today and see if you can make a claim.