GET RICH QUICK? NOT LIKELY!

RMT helpline 0800 376 3706 :: february 2019 :: RMTnews 12 Every year, pension scam victims lose an average of £91,000 from their pensions. And when it’s gone, it’s really gone. You won’t get it back. Pension fraud is doubling every year, but the true number of victims is probably much higher because many are too ashamed to report it. And that’s where the problem lies. We think we’re too smart to get conned … and the pound signs start flashing. A tempting offer lands and it’s all too easy to get reeled in. But ask yourself – why should you be singled out for a deal that sounds too good to be true? There’s plenty of warnings in the media about cold calls, free pension reviews, overseas investments offering mega returns. But with up to 10 million people getting an unsolicited pension offer every year, and fraudsters thought to be behind one in 10 requests to transfer benefits out of a pension scheme, the risks are still high. Don’t let one of the victims be YOU! Pension scams come in many forms but tend to fall into two main categories: • The first encourages people to take cash lump sums from their pensions for ‘investments’. • The other involves tricking the victim into transferring their pension to a new provider. So here at RPMI, which looks after the railways pension schemes, we’d like to share some of the classic early warning signs: 1. Cold calling. The government is bringing in a ban on pension cold-calling this year, but if you get an unexpected call or email – don’t hang around, hang up. 2. ‘Loadsa’ money. You’re promised a tax-free lump sum worth more than 25 per cent of your pension’s total value. In reality, you could end up with nothing at all. 3. Promises of cash before the age of 55. You can only do this in exceptional cases like ill health. If the claim is fraudulent, the taxman will be after you ‘pronto’. 4. Tight deadlines. If you’re pressured into making a very quick decision (with a discount or bonus thrown in), it’s likely to be a conman pulling the strings. 5. Get-rich-quick investments. The investments are normally overseas (where you have no consumer protection) and typically ‘guarantee’ a high rate of return. Your money is likely to vanish pretty quickly and the taxman will still want his share. 6. The company’s contact details are only a mobile phone number or a PO box address and you can’t ring them back. THE PENALTIES Take money out of your pension early and you could be liable for a tax charge of more than half your pension’s value. This is on top of high commission or arrangement fees of typically 20 per cent to 30 per cent for agreeing to a dodgy deal in the first place. Your remaining pension savings are also likely to be placed into high-risk investments. Get rich quick? Not likely! All of the above issues are why the Pensions Regulator asks administrators like RPMI to carry out certain checks before agreeing to a pension transfer. We’re really not being awkward in taking time to carry out checks – all we are doing is helping protect members’ pensions. RPMI deals with around 20 pension transfer quotes every month, and we check them carefully for signs of fraud by asking the member to fill in a pension liberation questionnaire. We may also ask HMRC for advice if necessary. In the past, many fake ‘independent financial advisers’ have been stationed in scam hotspots like Malta, Hong Kong or Australia. Fortunately, overseas transfer requests have dropped since tax charges were hiked for non-UK registered schemes. But suspect offers can come from anywhere – including the UK. IF IN DOUBT … Check for registered, fully authorised independent financial advisers at fca.org.uk. Words to watch out for: be cautious if you read an advert or offer which uses any of these GET RICH QUICK? NOT LIKELY! Railways Pension Scheme (RPS) administrator RPMI warns that conmen are out to steal your pension