Charlotte Jackson is head of guidance services and customer protection strategy at the Money and Pensions Service. Her pensions guidance teams support those scammed on pensions and investments or who have questions and concerns about them.
Charlotte also works with the Financial Conduct Authority (FCA) and others to share any insights from her teams that may protect consumers from future harm. In this blog, to coincide with Scams Awareness fortnight, she talks about MaPS’ Pension Loss Appointment which helps customers who need to recover lost monies.
Scams can ruin lives
Pensions and investment scams can be devastating.
Just imagine: your retirement plans hanging in the balance because others have stolen or been reckless with your long-term savings. On top of that, you’re living with shame and possible recriminations because you ‘fell for’ a scam.
This may explain why many of our callers tell us they have felt suicidal and why only 40% of our callers who discover they have lost their savings actually do something about it.
Scams involving pensions can be extremely complex. They often involve multiple parties and regulators, unregulated advice and overseas investments. They can also be very lucrative for scammers.
Scams can range from criminal fraud to mis-selling. Sadly, many people fall victim to scams because they don’t understand the investment risks of complex financial products and the regulation that is designed to protect consumers.
Why it’s very difficult to recover monies lost through pensions scams
The complexity of pension scams can make it very hard to seek redress. This is because:
Victims may not know they have been scammed until years later.
When they do find out, on reaching retirement age for example, the provider or adviser has stopped communicating, disappeared or become insolvent – or the investment may have failed.
It is difficult for the average scam victim to know where to start. Redress can require persistence and stamina.
Many lack the skills and confidence to pursue it, while the trauma and shame of lost savings can understandably cause many victims to just want to get on with their lives.
Many people believe, often wrongly, that recovery options are limited to claims companies, solicitors and financial advisers.
Our experience is that claims firms will only pursue cases where they see a reasonable prospect of success and may take 30%+ of recovery amounts.
How MaPS can help – our new Pension Loss appointments
There is scams support out there, but it can be overwhelming to navigate when you’ve been scammed. It can also come at a price that people cannot afford.
That’s why we have a specialist free Pension Loss service. Our pension specialists help consumers to make sense of what has happened and all the bewildering acronyms. We discuss the possible redress options and provide helpful resources at no charge. This can be enough to enable a scams victim to approach the right organisations to recover at least some of the money they have lost.
Tim arranged a Pension Loss appointment after transferring £150,000 of his pension seven years ago. He had tried several different routes before approaching MaPS’ pension specialists.
A financial adviser had recommended a transfer to a Malta-based offshore pension scheme, known as a QROPS. Tim agreed to transfer all his pensions, including his workplace Defined Benefit (DB) pension. Years later, he learned his pensions were invested in an unregulated overseas property company, now bust, and a Bond with an Irish Life Insurance company.
Tim says: “I was told I needed £250,000 for a comfortable retirement – I only had £150,000. I was told I needed to take a high risk to get a bigger pension. I’ve maxed out on a mortgage – I’m just surviving. I was green, naïve. I still am.”
Tim complained to the relevant ombudsman in Ireland, with the help of a financial adviser. But his case was turned down as Tim had been persuaded to sign a form saying he was content with the high risk. The financial adviser recommended a Claims Management Company (CMC) as a next step which Tim was considering.
Ken, a pensions specialist who is expert in pension loss and recovery, supported Tim. He says:
“Tim’s case is particularly complex. It’s no wonder he didn’t know who to turn to. It was obviously overwhelming him. Tim told me: ‘I just want to be told what to do next. I don’t know what I’m doing.’ That’s a common response to this type of crisis – and anyone can be a victim.”
Ken pieced together with Tim what had happened and talked him through possible next steps. Ken told him that a transfer from a DB scheme in 2015 may have required independent financial advice from a UK registered adviser. He provided template letters to organisations that had been involved in the transfer at the time. Redress can often be a long process, but Ken encouraged Tim to contact the service again to look at any response he receives and guide him on next steps.
Ken says: “With our guidance, Tim can potentially save costly CMC fees and may be able to request reinstatement into his workplace scheme.”
- Customer’s name has been changed.