Scammers may promise to boost your pension by moving it overseas through a QROPS. But they may not be legitimate.
It used to be that my dodgy calls were all at home where, at least, I could take some details. But one firm at least has my mobile. I can't write notes when I'm in the street. Nor can I, as many do, reject these "unknown number" calls – it could be the offer of work from a big company via a switchboard.
Fight back - latest on scams
This call was from "Gregg" claiming to be a "city broker" (whatever that means). I told him – in all honesty – that I could not deal with him. I was shopping in Oxford Street.
He called again – after a gap of three weeks which is about par for this sort of firm – and found me at home. Now I could devote Gregg some serious time.
"Did I have a pension plan?" he asked me. I do.
Fight back - latest on scams
"And are you happy with the performance?" As no one is ever happy with our high cost, unlikely to beat a child picking stocks with a pin, pension companies, my honest answer was "no".
"So would you like a pension plan with outstanding results and a gift of £2,500 in cash in your pocket as well?"
A better pension fund? And money to spend as well? It would be a resounding yes if this did not smell like something that was just too good to be true.
Still, while I had no intention of handing over my sparse pension fund to a cold caller, I pushed him for details. All I had to do was to transfer my fund to a new management company.
Cream of the QROPS
And who and where was that? "It's based in the Seychelles for maximum tax savings. And because our partner in the Seychelles has lower costs than the expensive company you are now using, we can make this cash rebate. It would be even more if your fund was bigger or you had more than one fund," Gregg said.
As far as I know, the Seychelles is outside the UK regulatory system, so I would be taking a big risk. But Gregg assured me that my money would be safe in the Seychelles and would be in something called "QROPS" so I could get all money out of the plan when I wanted, tax free, and would not be forced to buy an annuity.
QROPS stands for Qualifying Recognised Overseas Pension Scheme. It was set up some decades ago, primarily for UK pension holders who were emigrating to Australia, New Zealand or South Africa where retirement income rules are different. But more recently the scheme was sold to others as a way around UK tax rules.
This abuse has led to HMRC and FSA action.
Making money from bio-fuels
As I am not emigrating, I don't qualify but this did not stop Gregg. I asked him then about the superior returns he was offering.
"It's all based on timber investment and returns from bio-fuels," he assured me. "The world has a high demand for these products and the United Nations is going to make it a law that a third of diesel has to come from bio-plants."
I am not sure if the United Nations can make laws, but I know bio-fuels are controversial because they take up land that could be used to grow food. More importantly, bio-fuel plantations have been an active scam for the very simple reason that, even if they exist, they are almost impossible to value. You need substantial expertise to work out what any land producing an agricultural crop is worth – let alone something new like bio-fuels.
I tried to ask Gregg where the timber and land would be but he was vague, saying he would have to consult his manager first. Because I have no idea of the real cost of what I would be buying, it's clear that I could be charged almost anything, making it easy to give me the £2,500 – it would be my own money back. It is also easy to promise an attractive first- and second-year return – if you charge double or treble the price, then it is simple to offer 15% a year by returning part of the investor's over-payment.
I declined his offer. I may never hear from "city broker" Gregg again. But now my mobile is on the list, there will almost certainly be others chasing my tiny pension pot.
- 1. Land banking
Land banking involves plots of land offered for sale, often online, with the promise of sizable returns when planning permission is approved for housing or other development. Yet often the land is located in areas protected from development by planning law.</p>
The companies involved soon disappear with investors' money and as the firms are not protected by the Financial Services Authority, their funds are not covered by the Financial Services Compensation Scheme</p>
- 2. Money mule
Fraudsters recruit unknowing accomplices through email under the guise of offering employment, seeking a personal favour, or through internet shopping sites. The recruits are persuaded into receiving what are essentially fraudulent payments and then passing funds on.</p>
The 'mules' are frequently offered a small financial incentive to encourage involvement and face difficulties in proving their innocence when the fraud is discovered.</p>
- 3. Carbon credit fraud
The scams claim to offer people the chance to profit from carbon credits. Under regulations that permit businesses to emit a tonne of CO2 – the companies claim to offer investment in green projects like a forestry scheme or a solar panel project, which generates carbon credits that are then sold on to heavy industry.</p>
A flashy brochure or website tells of a reliable 'government-backed' scheme which provides reliable returns for investors. Such a scheme doesn't exist however – a reality investors only discovered when they have parted with their cash and the company is untraceable. As with land banking, fraudulent companies are not covered by the FSA so victims have no course for recompense</p>
- 4. HMRC phishing scam
Receiving an email from the taxman saying you are owed a payment may seem like a nice surprise, but it is actually from fraudsters trying to relieve you of your cash instead.</p>
The emails provide a "click-through link" to a cloned replica of the HMRC website. The recipient is then asked to provide their credit or debit card details - all the information the criminals need to clear your account, and sell on your personal details.</p>
- 5. Disappearing loan scam
This scam targets vulnerable people who are in financial difficulty and unable to access credit through regular channels like overdrafts and credit cards.</p>
The fraudsters advertise loans and those that sign up are asked to pay an upfront 'arrangement' fee of around £60-£70 fee before the loan is approved. Borrowers pay the fee only for the 'loan providers' to disappear without a trace.</p>
- 6. Crash for cash scams
Insurer Direct Line reported a hike in the number of 'crash for cash' scams last year – where fraudsters fake accidents by making unnecessary emergency stops at busy roundabouts or slip roads, forcing motorists to crash into them.</p>
They then make bogus claims to the innocent motorist's insurer, often including fictitious injuries and passengers.</p>
- 7. Driving school scams
Learner drivers have been taken for ride by being unknowingly taught by trainee instructors. An investigation by the AA found up to 27,000 extra driving tests have been failed in the last year because one in 10 learner drivers are unwittingly taught by an instructor they do not know is learning on the job.</p>
- 8. One man mail scam
July saw the arrest of a Leicester postman who stole £46,686 worth of mail over two-and-a-half years. Yogeshbhai Patel, 38, was jailed for two years for stealing mail including 2,000 DVDs and 2,250 games along with CDs and other electrical equipment. He intercepting the valuable packages and spent the money on living a luxury lifestyle including helicopter rides and a trip to Las Vegas.</p>
- 9. Smart meter scam
The Trading Standards Institute reported over 200 cases where elderly homeowners have been targeted by telephone cold callers, purporting to be from their energy supplier and offering energy saving devices which could cut their bills by 40%.</p>
The TSI tested the devices in homes where owners had fallen for the scam, only to find they both failed to satisfy electrical safety standards or deliver any tangible energy savings.</p>
- 10. Thermal camera fraud
Thermal cameras that track ATM pin numbers are the latest weapon in their arsenal and US scientists have warned it is the next threat for this form of crime. Researchers at the University of California at San Diego found that up to 45 seconds after a person types their pin code into an ATM machine or door entry pad the numbers and even the sequence are still readable by thermal cameras.</p>