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Victim of Financial Fraud: Tough!

One thing the Pension Freedom changes have brought out of the woodwork is fraudsters; suddenly there is a significant number of people with cheques for tens of thousand of Pounds and no clear idea of what to do with it. They generally do not have a relationship with a regulated financial adviser and have no history of paying for financial advice, so if someone offers a “free” review or an “unbeatable offer”, they have no frame of reference to compare it with.

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What makes things worse is the authorities will do little to recover their money. A recent article in the Telegraph makes the situation clear, http://www.telegraph.co.uk/finance/personalfinance/investing/11812377/Victim-of-fraud-Why-the-authorities-WONT-investigate.html; what may be a life-changing sum to the victim is small beer in the scheme of things. Frauds are notoriously difficult to prove and prosecute, so scarce resources are concentrated on the “big ticket” or the industrialised fraudsters, scamming hundreds of victims for thousands of Pounds.

The Financial Conduct Authority, The Pension Regulator and the Money Advice Service have all updated their advice to potential victims, but as usual many victims are not engaging with the free resources available before they meet a scammer.

Irritatingly, the Telegraph article asks for a ban on all cold calling for financial products. For regulated advisers like us, there is already a ban, so the only people making cold calls are marketing companies, who will sell on their leads or the scammers directly. Perhaps the law needs to be turned on its head? Maybe the public would be better off if the regulated financial advisers were able to cold-call prospective clients with any non-regulated individual facing fines or imprisonment for just mentioning regulated advice?

The American gun lobby often point out that in a country where guns are banned only the criminals have guns. Currently in the UK, where cold-calling for regulated advice is banned, only the scammers are cold-calling!

The Pension Regulator provided the following warning signs:

  • A cold call, text message, website pop-up or someone coming to your door offering you a ‘free pension review’, ‘one-off investment opportunity’ or ‘legal loophole’.

  • Convincing marketing materials that promise you returns of over 8% on your investment.

  • Paperwork delivered to your door by courier that requires immediate signature.

  • A proposal to put your money in a single investment. In most circumstances, financial advisers will suggest diversification of assets.

  • They may claim that you can access your pension before age 55.

  • Transfers of your money overseas.

(http://www.thepensionsregulator.gov.uk/individuals/dangers-of-pension-scams.aspx)

Contact me with queries 

If anyone is looking for general advice, then please write in to the blog and I would be happy to help with anonymous advice posted here. Alternatively, please call us on 0116 253 5600 and ask to speak to an IFA, (Independent Financial Adviser), for a no-obligation discussion.

If you know you need formal advice, have a look at http://bankfield.net/, or ask around for a recommendation, it might even be me.

Categorized: Pensions , Protection , Retirement Planning , Risk Management , Wealth Management
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