Posted on: 24th August 2015
What exactly defines aor scam? Well, you could in short say that the term refers to any kind of pension or opportunity that pretty much guarantees a healthy return for those selling it but will most likely result in heavy or total losses for you. All and investments carry risks, but in the case of a scam the risks are both highly-elevated and not communicated to those they’re sold to – aka the ‘scam’ part of the idea.
It’s a terrifying thought, but research suggests that at least a third of people will be targeted by these kinds of fraudsters during their lives. What’s more, studies have also shown that less than a third of all adults would in fact be able to spot a pension orscam were they to be presented with one.
This is why it’s of crucial importance to read up on a few of the key warning signs to watch for, along with tips on how to protect yourself from these kinds of scams.
Spotting a Scam
In terms of spotting a scam, there are certain tell-tale warning signs that what you’re being offered is both bogus and dangerous. The sales pitch thrown your way can be very convincing, but if you get even a whiff of any of the following promises or techniques, you need to walk away immediately:
- Any kind of guarantee that the prospect is 100% risk-free – the reason being that there never has been and never will be such a thing as a risk-free .
- Claims that there are loopholes in the UK government’s pensions and taxation systems which if exploited mean that far more than 25% of your pension pot can be taken out tax-free.
- The promise that they’ll be able to help you get into your pension before you reach the minimum age as specified by the government.
- Unscheduled knocks on the door by those who are directly selling pension and services.
- Any kind of indication that they are trying to rush you into making a decision, or claim it’s a limited-time offer that expires soon.
- If they’re unable to give comprehensive contact details and discourage you from calling the office at a later time to discuss what’s on offer.
In terms of protecting yourself from such shady characters, there are essentially only two rules to follow.
First and foremost, never rush into making any kind of decision or allow yourself to be pressured into signing up for anything without a prolonged period of careful consideration.
Secondly, you must be sure to check up on the brand/business that’s trying to sell you theor pension plan by both carrying out online searches and speaking to the Financial Conduct Authority if necessary.
A good financial advisor will also be able to point you in the right direction and help ensure that all such scams are avoided. The key therefore being to never take anything suspicious at face value, but to instead give yourself time to check it out in full before making your final decision.