How to safeguard your money from scammers

British expats face a barrage of attacks by scammers who want to grab a slice of their savings and pensions – and the government is powerless to stop them.

Expats with SIPPs or Qualifying Recognised Overseas Pension Scheme (QROPS) are among those at risk, according to pension providers.

Aegon, one of the largest financial firms, has claimed up to 80% of requests received to transfer money into a QROPS are from crooks trying to swindle savers out of cash in their pensions.

Even pensions minister Ros Altmann has confessed she cannot take any action that will stop the scammers.

We are very concerned by scams of all kinds,’ she said. “They have been there for years, it used to be called pension liberation and it happens time and again.

Fraudsters target expats

Expats also face problems when dealing with IFAs once they have left the UK.

Financial regulation and trading standards rules vary from country to country.

Many Brits abroad report losing their savings after meeting a dubious financial adviser in expat hang-outs.

Dodgy deals offered by scammers

Scammers tend to offer opportunities to take part in high yielding investments.

The most common are: 

• Boiler rooms – salesmen with a slick patter selling worthless shares at inflated prices, often on the proviso you should invest right away because they have inside knowledge that may be revealed any time that will push the share price up

• Land banking – Sellers claim plots of land lie on the outskirts of prime development areas and will jump in value when planning permission is granted

• Forestry and crop schemes – Showcased as ethical investments, these deals include biofuels, timber and cash crops offering returns of 15% to 20% over five years, when the land is bought back at a profit.

• Carbon credits – Big companies trade these credits in bulk to offset their carbon footprint. However, the markets are not open to individual investors and there is nowhere to dispose of them

• Rare earth metals – These are abundant but hard to process, so ‘rare’ is a misnomer.  Firms deal with huge quantities of raw materials to process to extract small amounts of rare earth metals. Like carbon credits, individuals are locked out of the markets and any investment is generally worthless

• Forex trading – Claims like you can make $800,000 in a week with a specialist binary options or forex scheme are rubbish. Only the software seller makes a profit from your investment

• Hotels, resorts and property – Lavish luxury accommodation in a tropical paradise is promised, but the truth is most property deals fail to materialise and the promoters disappear with any cash put up by investors

Other scams trending recently involve coloured diamonds and overheated sapphires. These are sold as gemstones, but generally have little or no value. The sapphires are often said to originate from Sri Lanka, where the world’s best sapphires come from.

Frauds involving fine wines that do not exist but are claimed to be held in bonded warehouses are becoming more popular.

How to spot a scammer

The key, say scam investigators, is that if the opportunity sounds too good to be true, is it really is.

Investors should think about why a stranger they have just met in a bar or club is offering a chance to make them rich.

Think about what they are gaining from the deal rather than the promised riches you receive in return.

In most cases, they are marking up worthless investments or plotting to steal hard-earned savings.

If you are approached by a suspicious adviser, how do you spot if they are a scammer?

Your first move is to see if they are regulated and licensed to give pension and investment advice by the financial regulator in the country where you live.

Ask the adviser who regulates them and for their licence number.

Do not phone any number they give you, as this is often a colleague primed to give an answer.

Instead, find out who the financial regulator is and check the adviser’s credentials online or by phone.

See more on how to choose a financial adviser.

Just say no

Police have arrested and charged a number of alleged unauthorised financial advisers after complaints from expats in Thailand who claim they have lost thousands of pounds of savings to fraudsters.

Some of the firms were based in Hong Kong, but had no licence to give investment advice in Thailand.

Besides checking credentials, taking impartial advice from a properly authorised and licensed independent financial adviser is a good way to protect your money.

IFAs playing by the rules are subject to offering independent redress procedures if clients suffer an unexpected financial loss.

Don’t get caught in the trap of receiving poor advice from an adviser that isn’t qualified or a company this is not regulated.

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Tags: scams investments pensions