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Pensions scam warning: 7 hoax schemes that ‘smash people’s lives’ | Personal Finance | Finance

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The Pensions Regulator (TPR) has unveiled an inventory of seven ploys that scammers use to lure people into handing over their money. Nicola Parish, executive director of Frontline Regulation Criminals at TPR, said: “Criminals who steal people’s pensions smash lives. It’s plain and easy.

“And because the regulator for workplace pensions, our primary focus should be on ensuring savers’ pension money is protected now and in the long run.

“Scammers use psychological deception and skilled looking materials to trick people out of their savings.

“In the event that they can, they’ll take every penny and devastate savers’ financial futures.

“That’s why we’re determined to do all we will to coach savers on the danger of scams and to assist stop scammers of their tracks.”

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The devious tactics that scammers used to persuade victims handy over their money include:

  • Investment fraud – Misrepresenting high-risk or false investments to savers
  • Pension liberation – Conning savers into accessing their pension pots under the age of 55, unaware that they’ll get a tax charge or might be engaging in tax evasion
  • Scam pension schemes and providers – These bogus schemes either don’t exist or exist but are committing fraud
  • Clone firms – Fake schemes and providers which are disguised as legitimate entities
  • Claims management corporations – This includes cold-callers who will claim an individual has been mis-sold a pension, after which ask for an advance fee to start out a claim
  • Employer related investment (ERI) – Breaching ERI restrictions when an employers diverts their employees’ pensions into inappropriate investments, causing losses for savers
  • High fees – Excessive fees often layered through needlessly complex business structures

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The TPR has unveiled a method to higher protect savers from being a victim of scams, through educating people, improving industry practices and stopping and punishing fraudsters.

The regulator has warned that too many schemes have poor guidance and administration, leaving people’s savings exposed to fraudster.

Ms Parish said that savers might be especially vulnerable with the fee of living crisis and the impact of the coronavirus pandemic.

She said: “Industry must act to deliver good outcomes for savers by being proactive of their pension scam warnings, progressive in driving improvements in protection standards, and reporting potential crimes to the authorities.

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“Constructing on this, we and our partners in regulation, law enforcement, and government must also play our part – ensuring schemes are up to plain and dealing together effectively to maintain savers’ money secure.

“Every one in every of us has suffered over recent times due to Covid-19 pandemic and value of living pressures.

“It’s at times like these that we all know savers might be vulnerable to the approaches of pension scammers.

“That’s why now could be the time for industry, regulators, and Government to do more and truly work together to place savers at the center of all that we do.”

The regulator has warned that too many schemes have poor guidance and administration, leaving people’s savings exposed to fraudsters.

Research by PensionBee shared with Express.co.uk found that only 57 percent of victims ever fully recuperate what they’ve lost.

Phishing and identity fraud were amongst essentially the most common ploys that scammers use.

Romi Savova, CEO of PensionBee, told Express.co.uk: “It’s a tragic reality that sophisticated criminals prey on savers.

“Savers are simply searching for to take advantage of their money in a confusing economic climate.

“Scammers can goal anyone, so it’s crucial that each one consumers remain vigilant when sharing any personal information and refuse to have interaction with anyone who contacts them out of the blue.”

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