Investment scams

Pension liberation fraud

Take caution if considering liberating or releasing funds from your pension. Have you received a cold call tempting you to release monies early thanks to a 'legal loophole'?

What many victims do not know is that with this type of pension scam they also face owing substantial sums to HM Revenues & Customs (HMRC) for making an early release. This bill to HMRC remains due even if the victim never received the liberated funds and a fraud can be proven. 

A typical pension liberation fraud scenario

Victims are cold-called and advised that a ‘legal loophole’ can see part of their pension fund cashed in. 

The caller will take a commission and the victim will be assured that the remaining sum will either be invested in a high-yield opportunity or returned to them less the commission fee. 

A courier may be sent to the victim's home address with transfer documentation to sign. This keeps the momentum of the fraud going and many people are likely to sign the documentation while the courier waits rather than having the papers reviewed and seeking independent advice. 

Once the monies have been 'liberated' victims find they are left without their cash and have also been charged a tax by HMRC for a release they never benefited from. 

Help for victims

The Pensions Advisory Service advises that pension liberation fraud can occur when you try to transfer your pension benefits to an unregulated scheme before the age of 55. Organisations offering these opportunities frequently refer to them as ‘pension loans’ and offer cash incentives to victims to sign over their pension benefits.

Grant Thornton is currently appointed on cases involving large-scale pension fraud, where our role is to trace and recover misappropriated funds and bring legal claims against those responsible for the loss. We are often appointed insolvency practitioners over a number of companies and individuals involved in the fraud to ensure we have access to information and powers necessary to recover maximum funds.

A pension scheme fraudster may claim that the monies were legitimately ‘invested’ in various schemes; our in-house pension, corporate finance and valuation expertise allows us to assess the validity of such claims.

Our extensive experience in dealing with complex international frauds common to pension scheme frauds allows us to piece together the true story to ultimately recover funds on behalf of the victims.

There are various independent advisory services who can help discuss your pension requirements.

Should you believe you have been a victim of a pension fraud and wish to learn if Grant Thornton can help please contact AssetTracingRecovery@uk.gt.com