The Anatomy of a Pension Scam
Just imagine the heartbreak that comes from losing your pension to a scammer. You’ve worked hard all your life and built up a sizable nest-egg to carry you through retirement and in the process to leave something for your loved ones later on. You’ve been sensible, you’ve avoided all those get rich quick schemes then you fall prey to a scammer who wipes out all of your pension when you least suspect it.
It’s easy to be hoodwinked by these people; they’re very persuasive, they offer you a greater return on your money and they know how to appeal to your temptation. Many of these scammers have operated successfully for a number of years, and once your money is gone there is often very little you can do about it without help from the experts.
Tempted by the brokers you know and trust
A number of scams have been run via independent, trusted brokers, people you may have known for a long time, who you might almost regard as friends. They have been recruited themselves by unscrupulous individuals who offer sizable commissions for them to get clients to sign up.
Pension holders are tempted by the offer of returns on their investments that they simply won’t find anywhere else. The scheme seems to be a reputable one, a vehicle that will increase their hard-earned savings with seemingly little or no risk. For those crucial few hours or days, the victim’s guard is down, and that’s when the inevitable disaster starts to unfold.
What to look out for
There have been a number of diverse pension scams in the past, enticing the victim with any number of temptations. In general, however, each of them have had a somewhat common set of factors. In almost all cases, there is no Financial Services Authority or Financial Conduct Authority protection or validation and there’s usually a very high level of commission in order to tempt brokers into the process.
Unregulated Assets included:
The Resort Group
Global Forestry Investments Belem Sky Plantation
It’s also worth noting that scams like these aren’t just restricted to pensions. People who have significant levels of savings have also been targeted, as have those with high equity levels on their properties.
How you get sucked in
These scams tend to follow a similar pattern. The victim is approached by a cold caller on the phone or via a text message or email. Others may see a pop-up appear on a website. These messages will question the sensibility of keeping a pension where it is, highlighting how low the returns might be and then ask whether the owner will be better off making an investment which promises far more of a return.
The perpetrator will sometimes even promise a bonus and perhaps highlight tax-free returns on some of your money, returns which you will already get anyway. They will often say that there’s a time limit to how long these offers will be available, and will pressurise the victim by saying the clock is ticking. In the end, the victims will often say yes because they are scared of missing out, and because they don’t want to look stupid.
Sadly, by the time the victim even discovered there was anything wrong it was too late, and they’d lost most or all of their investment. It’s easy to imagine just how heartbroken the victims were when they realised what had happened.
If you’ve been the victim of such a scam, have a chat with our friendly team today on 0800 193 1234. You could be entitled to compensation, and we’re ready and waiting to discuss your case with you.
Many investors were tempted not only by the potential returns they could receive but also by the attraction of investing in sustainable ethical plantations. Sadly, this was nothing more than a fraud that deliberately misled people into putting their money into land and crops in Cambodia. The ringleaders of the scheme were eventually sentenced to a total of 28 years in jail.
Victims were persuaded to move their money into self-invested personal pensions (SIPPs) with a promise of significant financial returns. A complex web of companies and unregulated advisors persuaded people to invest, and the end result saw many victims receiving far lower returns than they had hoped. If you feel you’ve been mistreated by TRG, contact us today.
Investors in this scheme were charged £5,000 for plots of land in the Amazonian rainforest, with a promise of 10% returns per annum. This didn’t materialise at all, despite boasts that investing in teak would be more profitable than gold, and it’s estimated that more than £20 million has now been lost.
One of the most notorious cases of all, Harlequin sold investments in luxury resorts in the Caribbean. Sales of these plans brought in a commission of 15% for the unregulated brokers, and many people lost a small fortune. So far, investors have been paid over £100 million in compensation.
Another scheme that promised superb returns, Store First was centred on the construction and development of self-storage warehouses. Investors were persuaded to part with large sums of money in return for significant long-term profit, but in the end it was just another example of unscrupulous fraud.
Those who sold Park First investments talked of protected income and a fixed return of 8% over the first four years. It sounded too good to be true, and in the end that’s exactly what it was. In 2017, Park First recorded a loss of £30 million, leaving many investors regretting their actions.