Pensions and investments

Pension scams and investment fraud

How do the scams work?

Pension scams and investment fraud

Pension scams and investment fraud are often difficult to spot as they're designed to look genuine.

As an example of a pension scam, someone could be contacted unexpectedly for a 'free pension review'. This might be via a phone call, an email, text message or an offer in an online advert.
People who operate investment scams use sophisticated techniques to build trust and convince even the most experienced investors out of their savings.

While these offers appear to be legitimate, most of the firms and individuals involved in these offers are not authorised or regulated by the Financial Conduct Authority.

Remember

If an investment opportunity sounds too good to be true then it usually is

How can I protect myself and my investments?

The Financial Conduct Authority is the conduct regulator for financial services firms and financial markets in the UK. If you need investment advice, then you should go to an adviser that is authorised and registered by the Financial Conduct Authority.
If you need help in finding a regulated adviser, Unbiased is a good starting point to search for an authorised and regulated adviser near you.
MoneyHelper is an independent organisation supported by the Department for Work and Pensions that provides impartial free advice and guidance to support individuals with their retirement decisions and when investing.
Learn how to spot the signs and check who you're dealing with on the ScamSmart website to give yourself the biggest protection against fraudsters.
The Pensions Regulator (TPR) can also help you understand how to protect yourself from scammers.
Action Fraud is the UK’s national reporting centre for fraud and cyber crime where you should report fraud if you have been scammed, defrauded or experienced cyber crime.

If you have any concerns in respect of any unsolicited contact about your LV= pension, please email us at [email protected].

How could you be targeted?

Companies sometimes target savers claiming they can help them take their pension cash early. This may be through websites, mass texting or cold calls. Be very cautious about giving out information in response to a text or cold call. Make sure you know who you're dealing with.

Pension liberation fraud

Pension liberation, also known as 'pension loans' or 'pension scams', is the transfer of pension savings to an arrangement allowing you access to your funds before the age of 55. In rare cases, such as terminal illness, it's possible to access funds before age 55 from a pension scheme. But most of the time, promises of early cash are false and likely to result in serious tax penalties, high fees and/or penalties. These hidden costs can be more than half of the value of the pension plan. Pension liberation can also be illegal.

Pension Wise never cold calls

If someone cold calls you saying they are calling from Pension Wise, you can be assured that they are a fraudster, and only looking to add legitimacy to what they are trying to do - get their hands on your pension pot.

What are the risks?

If the 'investment opportunity' is a scam, you stand to lose all of the money that you have invested.

If there is an actual investment, your pension pot is typically invested in unusual, high-risk investments such as overseas property, forestry, storage units, care homes, biofuels and therefore there is a significant risk that you would lose some or all of your investment.

It might also be difficult to sell any investments to get any of your money back.

In either case, it is likely that the funds you had earmarked to provide for your needs during your retirement will be significantly reduced and possibly lost completely. In addition, if things go wrong you will not be able to complain to the Financial Ombudsman Service or claim against any compensation schemes as the firms and individuals involved in these scams are not authorised and regulated by the Financial Conduct Authority.

Remember, if an investment opportunity sounds too good to be true then it usually is.

Four simple steps from the FCA to protect yourself from scammers

Step 1

Reject unexpected offers

Step 2

Check who you're dealing with

Step 3

Don't be rushed or pressured

Step 4

Get impartial information or advice

If you’re contacted out of the blue about your pension or with an investment opportunity, chances are it’s high risk or a scam. Be wary of free pension review offers. A free offer out of the blue from a company you have not dealt with before is probably a scam.

Check the Financial Services Register (www.register.fca.org.uk) to make sure that anyone offering you advice or other financial services is FCA-authorised. If you don’t use an FCA-authorised firm, you also won’t have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme.

Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision. Take your time and make all the checks you need to, and be wary of offers that sound too good to be true!

The Pension Advisory service provides free advice or contact an FCA authorised and regulated Independent Financial Advisor. If you do opt for an adviser, be sure to use one that is regulated by the FCA and never take investment advice from the company that contacted you or an adviser they suggest, as this may be part of the scam.

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Cyber aware

How to avoid becoming a victim of financial crime

While financial crimes come in many different forms, it's important to protect yourself as best you can.

To make sure you don't get caught out, you need to be prepared to spot the signs of fraud and cyber-crime to keep you and your money safe.

Being a victim of a cyber-attack has many implications, so staying secure online is essential to protecting your personal identity and finances.