I’ve had a few questions about the safety and security of their investments during the coronavirus crisis ad thought it would be worthwhile giving you all some general advice about the best way to make sure you keep your money safe from some of the scams that are around at the minute.
Peter Glancy, Head of Pension Policy at Scottish Widows, reckons that we are already seeing
organised criminals exploiting the coronavirus crisis to get their hands on people’s hard earned cash with a series of new scams including pension related frauds which appear to be legitimate. “The Chartered Trading Standards Institute (CTSI) last week urged the public to be aware of emails claiming to be from the government, offering a tax rebate to help people through this difficult time. People are asked to fill in their details, including their bank card details, so that scammers can withdraw money from their target’s account. And we know that an already popular tactic for scammers is cold calling or texting pretending to be from banks or pension providers, claiming that their money is at risk and urging them to move their money to a ‘safe account’.”
Here are a few simple steps you can take to help keep your money safe.
1. Don’t fall for a cold call
If you get contacted out of the blue asking for details of your pension or other investments, you should be on guard straight away. Even if they say they’re calling from an official government body like The Money and Pensions Service (formerly the Money Advice Service) or Pension Wise, if it’s unsolicited, it’s likely to be a scam. Most companies never cold call, email or text to ask for your account details (like your user ID and password), PIN, CVV number, or to move money to another account. Always take steps to verify the identity of a caller. Never take their word. Hang up and call back on a trusted number, from a different device if possible. A genuine company will never have any problem with you doing this.
2. If it sounds too good to be true, it probably is.
Be on the lookout for ‘deals’ that promise high returns. If they’re saying it’s a ‘limited time offer’ or a ‘loophole’, the reality is that these kinds of opportunities are unlikely to be genuine. Likewise, if a caller is offering you something out of the ordinary, like the opportunity to access your pension before the age of 55, you should think twice about whether it’s genuine or not.
3. What are you being asked to do?
Think carefully about what you’re being asked to do. If they’re asking you to invest in something unusual or something you’ve never heard of, it could be a scam. Fraudsters might claim that you need to invest in these additional assets to help you grow your pension pot. Although some specialised investments can be helpful, nothing is ever a requirement when it comes to growing your pension, so be overly cautious and avoid making any decisions on the spot.
4. Are they asking for money?
A big red flag to watch out for is anyone asking you to withdraw money urgently from your pension or bank account for an investment opportunity. Especially in these uncertain times when there’s a lot of talk around making new investments, the risk of scams is heightened. You should never have to withdraw funds from your pension to invest them, so be wary of anyone claiming otherwise. There’s also a risk of tax penalties for doing this, so the stakes are high.
5. Never rush in
No one should be put under pressure to make a knee-jerk decision and commit on the spot. Fraudsters will usually tell you that the offer is only available for short period of time in order to pressurise you into a commitment.
6. Consider your options
Some may be weighing up the benefits of transferring their pension as a result of these exceptional circumstances. However, you need to be aware that volatility in investment markets could mean that the value of their pension pot changes significantly during the transfer process.
7. Do your homework
Doing your due diligence is essential and can be as simple as searching the name or company of the person contacting you online. If you can’t find them online or something doesn’t feel right, it could be a scam.
A version of this appeared in The Daily Record in April 2020.