New research by Fidelity has revealed that 13 percent of seniors in the UK have been targeted by scammers looking to steal pension benefits. From AOL Money:
[The scammers] promise their victims that they can free up money tied up in their pension before they hit the age of 55 – and get their hands on their 25% lump sum or more. Those who are taken in by this sort of scam will lose most – if not all – of their savings.
The way these fraudsters work is that they tell victims they can free up part of their pension, and then the rest will be invested for them – often with a guaranteed return. In order to get their hands on their cash they have to transfer their pension into the ownership of the business the scammers have established for this purpose.
Often they will receive some sort of lump sum, but then the fraudsters will disappear with the rest of it. To make matters worse, because the pension investor has accessed their pension earlier than is allowed, they will also be hit with punitive taxes from the taxman.
Pension360 has covered a similarly harmful, but mostly legal, scam that occurs in the United States. Businesses offer seniors pension “advances”, which work like payday loans. Missouri is the only state to ban the practice so far.
Photo by www.SeniorLiving.Org