Pension Fraud and Scam Questionnaire

Published / Last Updated on 28/11/2022

In July 2021, the Financial Conduct Authority published that nearly £2.3m had been stolen in pension scams for the period January 2021 through to May 2021, that’s nearly £500,000 per month.  The average victim loses around £50,000.  This was during the pandemic and the trend continues today with fraudsters ‘preying’ on those struggling with the cost-of-living crisis.

Signs of a Pension Scam

  • You are contacted ‘out of the blue’ i.e., a cold call.  Cold calling about pensions has been illegal in the UK since January 2019.
  • If they use phrases like 'pension liberation', 'loan', 'loophole', ‘pension advance', ‘early access pension’ or 'pension cashback' then be warned.
  • Promises of better returns.
  • Release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise given it is an unauthorised payment (against Tax law) in most cases.
  • High-pressure sales tactics.
  • ‘Buy Now Whilst Stocks Last’ offers to get the best deal.
  • Using couriers to send documents, who then wait until you have signed the forms.
  • Too good to be true investments, high-risk investments, overseas investments e.g., a new hotel complex in the Caribbean, a new rail/seaport development in Spain, all unregulated with no consumer protection.

Combating Pension Scams

Your existing pension scheme provider has now been made responsible for due diligence on where your pension scheme is being transferred to.  There has always been a collective responsibility but now your existing pension scheme will be held financially responsible if it allows a transfer out and is a scam.

Pension Fraud Questionnaire

Pension providers are increasingly issuing pension scam or fraud questionnaires when a request for a transfer is made.  There are several automatic flags that pension providers look for such as:

  • Is a UK FCA registered and regulated financial adviser involved?
  • Is the proposed pension scheme that you wish to transfer registered with HMRC?
  • Are you overseas?
  • Is the new pension funding investing overseas? 
  • And many more.

The types of questions asked will be along the lines of:

  • What is the reason for transfer?
  • Can your existing pension scheme offer you the options that are allegedly offered by new pension?
  • How were you contacted?
  • Are you being rushed into a quick decision?
  • Was a courier used?
  • Has all communication been by email, telephone, and text?
  • Have you been told you can access your pension before age 55?
  • Is there any bonus, commission, or cash incentive to transfer?
  • Are there unusual or ‘clever dick’ tax savings proposed?
  • Is your pension moving overseas?
  • Have charges, fees and commissions been disclosed?
  • Have charges, fees and commissions been compared to your existing pension?
  • Is a financial adviser involved?
  • Is the financial adviser registered, authorised, and regulated in the UK?

Your existing pension scheme provider may block any transfer until they are satisfied that the transfer and the new scheme are legitimate.

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