Case study

Scams affect millions of people from all walks of life and ​often have devastating consequences.
Read Oliver's story to understand how you could be targeted and what to watch out for.

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Oliver's story

  • ​Tricked into being part of the scam.
  • Age: 45
  • Length of time in company pension: 15 years
  • Investment offer: overseas property developments

Oliver is cold called by someone who says his name is Paul, a financial adviser authorised by the government. He asks if Oliver is interested in making the money in his pension pot work harder – as well as releasing some funds for Oliver to spend as he likes.

Paul says he could get Oliver an initial cash back bonus of 30% of the value of his pension pot, and a much better return on his money – around 8%. All he needs to do is sign a document saying he wants to transfer his pension into another scheme, and the money will then get invested in a hotel complex in an up-and-coming area of Spain.
Paul tells him that if he agrees to be ‘locked in’ to the investment for 10 years, he will get an annual cash back payment of £1,000. Oliver is keen to make the most of his money – he’s heard that he’ll be able to do what he wants with his savings when he’s 55, so thinks this could be a good solution to beating the current low interest rates that mean his pension pot isn’t growing as quickly as he’d like.
Oliver’s a bit concerned that it sounds too good to be true, but Paul reassures him. He says he understands there are lots of crooks out there but he’s government registered. He promises to send Oliver some marketing material and encourages him to check out the website. He tells Oliver that there are only a few opportunities left and that it’s a
time-limited offer, so if he wants to make the most of it, he should act quickly.
The next day, Oliver gets a glossy brochure through his door – he has a read through and it looks very slick and professional. The website also seems completely legitimate. Oliver likes to think he’s an intelligent person, and Paul seems very nice and credible. In fact, Paul calls back that afternoon, and Oliver decides that you only live once – why not go for it? You have to speculate to accumulate.
Within a couple of hours, a courier comes round with some papers to sign. Oliver has a quick look through them and is surprised to see that the documents say he is now a company director and trustee of his pension scheme. He doesn’t remember Paul saying anything about making him a company director, but the courier can’t give him any more
information and Oliver keeps thinking of the time-limited offer. So he signs on the dotted line.
Later that year, Oliver decides to call up and check on how his investment’s doing. The line is disconnected, so he searches online and finds out that some pension transfer offers are scams. After several more months of trying to locate Paul and the missing money, Oliver calls the police and comes to realise that he has probably lost his whole pension pot. By signing the papers and becoming a company director, he has taken on new legal duties with Companies House and HMRC that he didn’t know about. This leads to HMRC fining him for tax-related offences. Not only has Oliver lost 15 years’ worth of savings – he’s also having to pay thousands of pounds in fines to the authorities.

What should Oliver have spotted?

  • Cold call
  • Claims of adviser being authorised by government – but not registered with the FCA
  • Promises of cash back under the age of 55
  • Unrealistic returns of at least 8%
  • Promises of higher returns if he agrees to being ‘locked in’ to a single investment for a number of years
  • Being rushed into signing couriered documents with promises of a time-limited offer
  • Documents naming him as company director and trustee of the pension scheme

This case study is provided by The Pensions Regulator. You can learn more by reading Scamproof your savings.

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