If fraudsters steal your pension, do not expect to get any money back, says the head of a government-funded official money advice helpline.
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The message from Michelle Cracknell, boss of The Pension Advisory Service (TPAS) is retirement savers are very much on their own if they fall foul of scammers.
TPAS is part of a coalition of government agencies trying to tackle pension fraud that includes HM Revenue and Customs (HMRC) and Action Fraud, the police web site for victims to report scams.
Cracknell explained that sophisticated fraudsters lure savers with promises of outstanding investment returns, then divert their cash through offshore companies.
The scams typically started with a cold call by telephone, email or text offering a free pension review, she said.
Cold call ban
Then, the adviser would suggest moving money from safe investments with regulated providers in the UK to overseas businesses that often did not exist.
The businesses often involved hotels, resorts, fine wines or eco-friendly companies.
Cracknell argues that a government ban on cold calling to offer financial services would halt the scammers.
“If a ban was put into place it would be a further protection to customers. Not everyone is aware of the scams. Most people tend to have a positive outlook that it’s OK when someone cold calls. Our advice is that you should be suspicious,” she said.
“Good financial advice companies don’t cold call. Government services don’t cold call. We would like every customer to refuse to take cold calls on their pension funds.”
Cracknell went on to explain that fraudsters were sophisticated criminals good at covering their tracks.
Most are hard to find and shift money quickly through layers of bank accounts and companies.
“Our response to people who have lost money is quite blunt. We need to make customers aware that while they should report fraud, the reality is that even if the pensions ombudsman rules in your favour, the chances of getting your money back are next to zero,” she said.
Figures released last week by Action Fraud revealed that just seven alleged scammers had been charged after the web site has received more than 2,000 complaints since 2011.
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