PENSIONERS are being targeted by a new wave of sophisticated fraud designed to fleece them out of billions of pounds of savings, a Sunday Post probe has revealed.
Senior detectives and industry experts say deregulation of the pensions industry has released colossal sums of cash into people’s pockets and gangsters are lining up to cash in.
Victims who have saved hard all their working lives are only realising their money has gone when it’s too late.
The authorities estimate crooks have already pocketed vast sums from the proceeds of pensions fraud and fear the new rule changes will see that figure increase dramatically.
Our investigation has revealed:
l Over-55s are being deliberately targeted by the crooks.
l The perpetrators use fake investment scams to part people from their nest eggs.
l Fake call centres and the latest telecoms systems are being used to trawl for victims.
l Police are locked in a race against time to take down the Mr Bigs who have already looted as much as £1bn from pensions.
l Gangsters normally involved in drug dealing are muscling in on the pensions sector because of the potential returns.
Detective Chief Superintendent John Cuddihy of Police Scotland confirmed intelligence showed organised crime gangs were diversifying out of more risky, traditional crimes and into pension fraud.
“Since the change in April it’s become very significant for criminals,” he told The Sunday Post. “They’ve looked at their own business model and have considered how they can use it to exploit the new pension regulations.
“We know schemes are already up and running, and potential victims have been contacted by Scottish-based crime groups.
“At the moment the money appears to be going into the pockets of the criminals themselves but we have the capability to monitor if the cash is being used to fund other activities such as terrorism.”
Pension expert Tom McPhail, of Hargreaves Lansdown, a leading financial services company, said allowing easy access to such huge sums of cash had provided a boon for both domestic and foreign crime gangs.
“It’s always going to be possible to find a minority of people who are going to be seduced by seemingly plausible investment schemes that turn out to be too good to be true,” he said.
“When it’s such fertile ground, it’s hardly a surprise crime gangs get involved.
“You’ve got more than £1 trillion pounds in the pension system and you’ve got £10-15bn of pension fund money typically emerging out of the pension system into older investors’ hands every year.
“That’s an attractive flow of cash to target.”
Since April, people have been allowed easier, early access to their pensions. The deregulation has provided a boon for many with cash being freed up early to allow people to take their dream holiday, pay for weddings and to live mortgage-free.
Using fake call centres and a network of computers to send enticing e-mails and text messages, criminals are deliberately targeting over-55s with plausible-sounding get-rich-quick schemes.
Backed by the gloss modern technology provides, crime gangs are able to make them appear to the untrained eye like genuine, trustworthy companies.
They use cold-calling tactics, round-robin marketing emails and text messaging all great tools that look super-slick.
But they are merely dodgy fronts with one sole purpose to plunder that cash meant to support people into their advanced years.
McPhail explained: “We are now beginning to see a growth in the targeting of over-55s.
“Far-fetched schemes like exciting chances in the Costa Rican hotel property development market, with more lucrative returns than boring old pensions, are being pitched.
“The problem is the scale of the problem takes time to emerge. It’s often only when people go back and ask for a valuation of their fund they discover the cash has gone.
“There are always going to be some investors who do not realise they are being sold a false promise.
“We know over the past few years somewhere between £500m and £1bn has been lost to fraud and the feeling across the pensions industry is we will continue to see the numbers increasing.”
Police chief Cuddihy said his officers and the people in charge of telecommunications companies were working closely together to negate the threat.
But he warned people still needed to keep their wits about them.
“The crime gangs have their own business model and they will use that structure to identify as many victims as they can,” he warned. “We need to highlight to the public this is an on-going problem.”
The full scale of the crime blitz might not become known for five to 10 years, when fake investments fail to mature.
With that in mind, McPhail said the current shark-like activity was expected to grow to a feeding frenzy.
“Proving fraud is difficult and the levels of convictions are very low,” he said. “If I were a fraudster this is the area of crime where I would be looking.”
Don’t let the scammers fool you: Here’s how
WITH scams on the rise, urgent information has been issued to help prevent people from falling victim.
The key advice issued by The Pensions Regulator states:
1.Never be rushed into making a decision.
2. Before you sign anything, call the Pensions Advisory Service on 0300 123 1047.
3. If you have already accepted an offer, report it to Action Fraud on 0300 123 2040.
4. Before you agree to anything, make sure the adviser is approved by the Financial Conduct Authority (FCA).
People approaching 55 are also being advised to read up on their options. For more information visit the website www.pensionwise.gov.uk
The Pensions Regulator said: “Scams, where people may be tricked into handing over their pension pots, are on the increase. Many of the offers seem very convincing, starting with offers of excellent returns.
“However, once you’ve transferred your money into a scam, it’s too late. You could end up losing all your pensions savings and in some cases face a tax bill of up to 55%.”
In the first quarter of 2015 it’s estimated £500 million has been lost to pension fraud.
The Pensions Regulator added: “By its nature it’s not easy to measure the precise scale of pension liberation fraud.
“Those involved in tax evasion or fraud do not of course seek to draw attention to their actions and fraud victims are often reluctant to come forward.”
The Scottish Business Resilience Centre which advises firms on how to stay secure has urged companies with occupational pension schemes and pension providers to be vigilant.
Graham Vance, the body’s financial resilience manager, said: “Our advice is always to use a regulated financial adviser.
“Genuine people who promote any kind of financial investment must be regulated by the FCA and their credentials can be checked on the FCA website.”
Andrew Warwick-Thompson, executive director responsible for the Pensions Regulator’s work to disrupt pension scams, said: “Scammers are sophisticated and well-organised shapeshifters, so we have to be resourceful and tenacious and work collaboratively with government, law enforcement and other agencies to educate the public, disrupt the activities of scammers and take legal action where necessary.”
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