It’s the worst nightmare of anyone who has been diligently investing online into a SIPP or through a workplace pension over the years but it has been reported there is currently a spate of foreign-based fraudsters targeting British pension pots. A report in The Times newspaper today claims Brits are being conned out of half a million pounds a day by criminals using the guise of well-known investment companies.
Termed ‘clone fraud’ by the Financial Conduct Authority (FCA), cold callers using the names of established financial services brands such Halifax and Vanguard Asset Management are promoting fictional investment vehicles they claim will be invested in company shares, property or alternative asset classes. New pensions freedom rules that have come into force mean investors are able to access their carefully invested funds earlier than before. The aim of the new rules is to allow individuals greater autonomy over how they use their pension funds. Earlier access means pension pots can be reinvested or put towards expenses such as paying off a mortgage or home improvements.
While most pension holders use the new freedoms responsibly and wisely, often to boost the benefits their investments bring them in later life, others are unfortunately frittering pots away on luxuries or, worse still, being lured into scams. The Times’ investigation suggests at least £200 million of pension investments have been stolen by fraudsters, though the report believes the true scale of the problem is in all probability far worse, with many victims too ashamed to report incidents.
The FCA, the UK’s financial watchdog, estimates 157 attempts to clone well know financial services and investment brands over 2017, compared to around 90 in 2015. The operations usually copy the website of the cloned company, with contact details altered to their own. Pension holders should be aware that regulated financial companies do not cold call and will only get in touch if an enquiry has first been made. If an online investment brochure is downloaded and personal information submitted, there should always be a notification that a follow-up call will be made. If such an enquiry has not been made, pension holders should be immediately on their guard. Another tell tail sign of a scam is if bank details provided are for a foreign account rather than one in the UK.
It is safest to simply decline all cold call or suspected cold call attempts at communication but if in doubt, double checking the company’s real website address and contact details through a Google search is a good first step. A call can be made to the company, but through an independently researched contact number, not one provided, to ask if there is any record of a marketing call of the kind received having been made. The safest route is to refer to the FCA’s online register of regulated companies and contact the company through the number provided there. The FCA site should also be accessed independently and not via any links sent in an email from the contacting company as there have even been instances of the FCA’s website being cloned.