Ever had an unexpected phone call from a company you’ve never had contact with before? That’s a classic cold call situation; an annoyance we’ve all experienced. Some of you might have found that on the other end of the line there is a pension investment salesperson. They may offer you a free pension review.
It’s important to be wary of a free pension review. It could be that the company is trying to persuade you to move your money from your current pension pot into a high risk investment like a self-invested personal pension (SIPP). They may tell you that they can boost your pension pot value. However, this advice isn’t always accurate, especially if you’re new to investing.
Who do they target?
According to research by Phoenix Group, one in four of us have been targeted by suspicious calls, texts or emails at some point in our lives.
The same research also revealed that around seven per cent of people who were targeted by these cold calls had actually released some or all of their pensions. 14 per cent responded to the contact. 15 per cent said they considered responding.
Overall, this is a lot of people who are putting their pensions at risk. They don’t always target a specific age group with these free pension reviews. Younger adults are almost as likely to be contacted as the older generation.
According to data by Xafinity, scammers could be involved in one in 12 pension transfer requests. It is estimated that £43 million has been unlawfully obtained in investment scams since April 2014.
What is being done about these scams?
In August 2017, the government announced new measures to ban cold calling in relation to pensions. However, the government recently missed the deadline. Now, we are unsure when this ban will be put into place.
Once the government does put the ban in place, we should see a crackdown on the number of scammers and unregulated firms, as it will be illegal for them to contact and mislead people into investing in fraudulent or high-risk pension schemes.
What do I do if I get offered a free pension review?
Financial experts advise that the best and safest thing to do if you get a suspicious call asking if you’d like a free pension review is to hang up and block the number.
What do I do if I’ve moved money as a result of a free pension review?
If you think you’ve been a victim of a free pension review scam, report it to Action Fraud as soon as possible. They will investigate this for you. You should also get in contact with your pension provider. This is because they may be able to prevent any transactions from being made.
If you’ve moved money into a SIPP and have lost money as a result, or weren’t fully aware of the risks you were taking when you invested, you might be eligible for compensation.
Are you worried that you’ve fallen victim to a mis-sold pension plan? Get in touch today to see how our qualified solicitors can help.