Can I have a word please? In fact – can I have three words?
Now, these are not just any old words – they are the keys the scammers use to unlock victims’ savings and make huge amounts of money out of destroying innocent people’s retirement income:
Lets look at these words in more detail to see how they become part of the language of fraud:
“Would you like a free pension review?” The answer is so often a heart breaking “yes please!” This leads on to the scammers telling a bunch of lies about how the existing (often final salary) pension is no good and needs to be transferred offshore and invested in store pods, car parks, holiday resorts, care homes, student accommodation, derelict German government buildings and forestry.
“Would you like a free pension transfer?” Again, people who don’t understand the question think “free” means “free”. It doesn’t. So often, the transfer ends up costing a huge amount in hidden fees and commissions which are not disclosed up front and often only discovered years later.
“You can access your pension free of tax”. That old chestnut! When you are told that by the author of the Tolleys Pensions Taxation Manual, it is hard to figure out for yourself that it isn’t true. But it isn’t. Or, at least, HMRC don’t think it is true and they send you fat tax bills.
“You can access your pension free of tax because of a legal loophole”. The scammers claim that because the liberation is a loan (which doesn’t need to be paid back) there will be no tax. Again, the scammers and HMRC don’t sing from the same hymn sheet and HMRC inevitably demand 55% tax on the “loan”.
Scammers try to fool victims into thinking they are regulated. One loophole often used is to become a tied agent of an offshore firm which is regulated to create the illusion that the scammer’s firm is regulated. Only too late do the victims realise this is not the case; there is no regulation in force and therefore no safety net when the inevitable happens and the pension fund is worthless.
In both knitting and crotchet, loopholes are an essential part of creating a jumper because they are used (and exploited) to put the next stitch in; the next row; the next part of the pattern. And this is how the world of the pension and investment scammers works. And the jumper gets bigger and bigger as every day the scammers find more ways to trick, con, deceive, defraud and scam thousands of victims out of their savings.
The scammers frequently trick victims into agreeing they are “sophisticated” investors in order to invest in high-risk, illiquid assets and UCIS (unregulated collective investment schemes). The victims often think the use of the word sophisticated is a compliment and they don’t realise this is just one of the many weapons in the scammer’s arsenal to help market the toxic wares.
The scammers’ business models become increasingly sophisticated as the industry and regulators struggle to keep up with their methods of scamming. The scammers got very rich selling other people’s funds for enormous commissions. Now they sell their own funds and conceal what the assets of the funds are. But, of course, the underlying investments are the same old same old toxic rubbish.
The scammers use very sophisticated terminology to bamboozle the victims into believing the investments are desirable: “highly diversified and non-correlated investment portfolio providing maximum growth”; “asset classes have not only attracted the attention of the fund managers but also many astute investors”; “state of the art markets (such as store pods)”.
In fact, this whole stinking mess can be summed up by the phrase: “no such thing as a free sophisticated loophole”.