Your IndustrySep 10 2014

Spotting and targeting techniques of liberators

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Stories are circulating about the likes of pensions minister Steve Webb being cold called, says David Trenner, technical director of Intelligent Pensions.

Mr Trenner says he too has received spam email offering to liberate his pension. He says what is clear is this is not a targeted operation, but rather a numbers game.

Mr Trenner says: “Firms are clearly buying mailing lists and working on the basis that if one in 5,000 will take the offer you only have to hassle 50,000 people to make a decent return.”

There is a growing trend that individuals are introduced to pension scams initially by fraudsters offering a free pension review, says Helen Dreyfuss, pensions technical specialist of The Pensions Advisory Service.

Often she says these ‘introducers’ are unregulated to give financial advice. They will often advise individuals that they are carrying out a review as part of a government initiative when no such government initiative exists, Ms Dreyfuss warns.

She says individuals are pressured into transferring and common tactics include sending documents by courier in an attempt to pressurise individuals to sign there and then. Ms Dreyfuss adds fraudsters are increasingly pretending to be regulated firms.

She says: “Individuals should take care to ensure that they have the exact name of the scheme.

“A new tactic has seen fraudsters using the name, ‘firm registration number’ (FRN) and address of firms and individuals authorised by the FCA to suggest they are genuine. This is called a ‘cloned firm’.

“Some fraudsters claim to represent authorised firms – or even try to change firms’ contact details on the register – to appear genuine. The scammers then give their own phone number, address and website details to possible victims.

“We have also heard of fraudsters claiming that a firm’s contact details on the register are out of date, but this is unlikely as the FCA update the register each evening.

“Scammers may even copy the website of an authorised firm, making subtle changes such as to the phone number listed.

“Fake versions of the FCA website and register have even been produced that include the fraudsters’ contact details rather than those of the genuine, authorised firm.”

There are ways to spot and avoid scams though, says Ms Dreyfuss. She says while investment scams come in many forms, common features are:

1) Phrases like ‘one-off investment opportunities’, ‘free pension reviews’, ‘legal loopholes’, ‘cash bonus’, ‘government endorsement’

2) Victims are approached out of the blue over the telephone, via text messages or in person door-to-door’

3) Money is transferred overseas

4) They are commonly advised that they will receive high guaranteed investment returns through overseas property investment opportunities or companies that you have never heard of. Investments are often non-tradable, worthless, overpriced or even non-existent

5) Access to pension before age 55

6) No member copy of documentation

7) Victims are encouraged to speed up the transfer of their money to the new scheme

Any of these features should be a warning sign that this could be a scam, says Ms Dreyfuss.