Some pension scam victims lose more than £1m to fraudsters - MSE News

dunstonh

My understanding today is that if you want to liquidate a substantial pension for cash, then you HAVE to engage an IFA

Only if there are safeguarded benefits on a fund over £30k. (GMP, guaranteed annuity rates etc - basically things with guarantees)

and presumably a proper IFA comes with professional status, liability insurance, and proper checks & balances. So how, exactly, are these scams still happening ?

Because most are not being done by IFAs as you would recognise them. i.e. not your local IFA office with 1-4 advisers dealing with local clients. Most are done by a tiny number of companies with a website and remote location (often a virtual office) with cold calling going on. They are not really IFAs in the traditional sense as their purpose was to set up and use unregulated investments and not act as an IFA. There is no IFA classification for the FCA authorisations.

These people have managed to get FCA authorised, go to some obscure SIPP provider (who have to be complicit given the scale) and then basically scam people. Indeed, a good number of them were done with firms with only mortgage permissions (so not an IFA or FA). A further chunk of these dont use IFAs or any regulated individuals at all because in reality, you didnt need an IFA or FA or regulated individual to do unregulated investments as they are unregulated.

One of the scammers claims to have done over 14,000 pension transfers in with a half billion transferred. And like most scams their website is full of embellishments. Logos of the Daily Mail, BBC, Times etc. A review system which obviously shows perfect or near perfect reviews only. They dont claim to be IFAs. But they get bundled in with FAs, IFAs and stockbrokers under the same control function.

The FCA has been criticised by IFAs for years for being too weak on applications for authorisations. Especially on phoenixing (where dodgy individuals do a year or two scamming and then close down and then set up again under a different name). It is also notorious for being slow on identifying issues. About 4 years ago I reported a firm with only mortgage permissions to the FCA for doing SIPPs and unregulated investments and they were not interested. Just think about that for a second. A firm regulated to only doing mortgages was in breach of its permissions. The SIPP provider probably was too for accepting business from a non-authorised source and cold calling unregulated investments was a known scam long before then. And the FCA didnt want to know.

So, basically, its industrial-scale factory line cold calling and marketing by a relatively small number of people/companies. It was easy to spot. If could have been prevented. It was ignored.

OldMusicGuy

Spelunthus wrote: »

Also, I feel compelled to say, that it generally takes two to strike a bargain - so there has to be an element of vulnerability, stupidity or greed (or all three) in some of these cases - but that never gets said....

Dunstonh said it in post 8 and quoted a good real world example.....;)

But I agree, both greed and naivety play a big role in this, which of course the scammers play on. Since I have been on this forum I have seen several threads warning people against investing in unregulated investments but they still go ahead and run into problems.

maloricsmam

After being contacted by a company offering a 'free' pension review in 2014, my husband and I unwittingly transferred his frozen pension (held by Aegon who did not warn us of risks - Scorpion warning ) into a QROPs Trafalgar Multi Asset Fund, we were unaware they are not suitable for UK based investors.

The financial advice we were given was by a company (recommended to us by the man who visited us from the pension review company) who employed the independant financial advisor (who we later learned was the person running the scam), it later transpired that instead of investing the pension monies in scheme that had been outlined to us this individual had instead used the pension fund (over 400 pensions) and made high risk unsecured loan notes to among others a German Property Development company. Once the scam was uncovered the fund was suspended, wound up and placed into administration in early 2016, 4yrs on and to date approx only half of the fund has been recovered but investors may not even see any of that as administration costs etc are deducted.

In the word of the serious fraud office the scam was complex and investors in this fund range from well educated people such as doctors, police officers and other skilled professionals to ordinary moderately educated and average paid working individuals such as my husband, who at 67 still has to work as we cannot survive on his state pension and my disability/nhs pension alone.

[Deleted User]

An old thread, obviously, but still interesting that many here are judging the victims as “greedy” and “naive”.  

“Greedy” people want more money. I admire those who are only in this forum because  they want less money. 

Being “Naive” is something that is likely to happen to most of us, sooner or later. As we get older our ability to make accurate financial decisions diminishes. And this is an example of decision making problems that can come with age. Younger people make such mistakes too but not as often. 

barnstar2077

The article has a scam message at the bottom of it.  One of those "we can get your money back for you" kind of follow up scams.  It would be nice if someone could remove it. 

molerat

barnstar2077 said:

The article has a scam message at the bottom of it.  One of those "we can get your money back for you" kind of follow up scams.  It would be nice if someone could remove it. 

Either it has been removed already or your computer needs a clean

barnstar2077

molerat said:

barnstar2077 said:

The article has a scam message at the bottom of it.  One of those "we can get your money back for you" kind of follow up scams.  It would be nice if someone could remove it. 

Either it has been removed already or your computer needs a clean

It is in the comments section at the bottom.  Under the name Rudd Martin. 

molerat

Weird - nothing there for me to see.

Found it using another browser, my FB container plug in removes all that carp

JoeCrystal

Molerat, it is a Facebook community plugin. Here is what it looks like at the bottom of the page. The MSE News article really shouldn't allow such comment sections to be honest.

kinger101

Deleted_User said:

An old thread, obviously, but still interesting that many hear are judging the victims as “greedy” and “naive”.  

“Greedy” people want more money. I admire those who are only in this forum because  they want less money. 

Being “Naive” is something that is likely to happen to most of us, sooner or later. As we get older our ability to make accurate financial decisions diminishes. And this is an example of decision making problems that can come with age. Younger people make such mistakes too but not as often. 

Well put.  The greed and naive labels being used border on blaming the victims for the crime.