The Pensions Advisory Service chief executive Michelle Cracknell has said that the guidance service is seeing more “legal scams” designed to defraud pension savers.
In a blog on The Pensions Regulator’s website, Cracknell notes the rise of cases where legal pension wrappers are used, but assets are being transferred into unsuitable investments.
Cracknell writes: “Pension scams are evolving. We are now seeing more legal scams. Either money is being transferred into legal pension wrappers, which then buy a legal but wholly unsuitable (and rather smelly) investment. Alternatively, where the customer is over age 55, the money is being transferred out of the pension and then buying, you guessed it, a legal but smelly investment.”
She also notes that scammers are telling clients that pension company ‘due diligence’ is a way for the company to find ways to keep your money with them.
Cracknell calls on the industry to raise awareness in light of the Government’s forthcoming cold-calling ban.
She writes: “The ban on cold-calling is welcomed but it will not stop pension scams, which are seen as rich pickings by the scammers and too easy a target. It is therefore essential that we all raise customer awareness on all scams but pensions in particular, where customer knowledge is so low.”