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Have you fallen victim to a pension scam? This is what the mis-selling process looks like

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Making decisions about your pension can be daunting. It’s difficult to know which advice to trust and you could get caught up in the mis-selling process.

We talk you through the warning signs that you might have been mis-sold your pension.

The mis-selling process

Unscrupulous advisers can come across as genuine, and sell an unsuitable scheme as legitimate. Even the most savvy have fallen victim to their scams.

Here are the things that should bring up a few red flags that an adviser has mis-sold you your pension.

They contacted you first

Legitimate financial advisers will not contact you out of the blue unless you get in touch first for advice. While it may seem like obvious advice not to hand your life savings over to a stranger on the phone, it could happen to anyone.

A cold caller likely got in touch offering a free pension review. You may have heard the following phrases:

“Is your pension working?”

‘Could your pension be doing better?’

‘Will you have enough to support you when you stop working?’

This is a cold-call script, read out by someone unqualified to offer you pension advice. These people knew nothing about your financial situation.

“Do you want to speak to an expert?”

After drawing you in with misleading advice, the cold-caller would have offered to pass you on to a qualified adviser for a review of your pension.

The caller likely said that your finances will be reviewed for free. However, you wouldn’t necessarily have known who was on the other end of that phone.

They passed on the mis-selling process

If you agreed to speak to an expert, the caller would have then passed you on to another company for advice.

It’s not always the cold callers

The most successful scammers have found success due to their ability to convince victims they are legitimate. Even if you did seek out your own adviser and do research into them, you could still be at risk of financial mis-selling.

Whether you found your adviser of they found you, the following may have happened in both situations.

They gave you options

After reviewing your pension, they may have offered you options to help your pension perform better.

This was probably in the form of a self-invested personal pension or SIPP.

If your adviser told you that a SIPP was a guaranteed way to make more money to rely on in retirement they could have mis-selling you the product. They may have even tried to sell add-ons such as life cover.

Overselling could be mis-selling

If your adviser tried to sell you the dream, they probably sold you a nightmare. Investing £X for high returns may have sounded too good to be true and it likely was. Did your advisor know the ins and outs of every scheme? Did they encourage you to ask?

If your adviser couldn’t answer questions on a scheme and didn’t highlight all aspects of the scheme – even the negative – they probably took you through the mis-selling process.

Type of investment

There are some types of investment you should avoid at all costs as they hold very high risks:

These investment types cannot offer the returns promised and some are even under investigation by the Serious Fraud Office.

Pension providers

If you were persuaded to take out a SIPP, be wary. Your pension may have been divided up by your SIPP provider. As a result, your retirement fund will be invested into lots of different investments.

Know who you’re dealing with

In some cases, the people that own the investment you ended up with also could have owned the call centre that originally contacted you. Take the recent case of TailorMade Independent and TailorMade Alternative Investments.

If you were not offered any other options, and were guided towards a certain few investments, you are likely to have been taken through the mis-selling process.

You’re not alone if this rings true and we can help you secure compensation to put you back in the position you would have been if you hadn’t moved your pension.

Get in touch today and our expert litigators can offer support and advice in making a complaint.