Forget Robert Maxwell (he stole his employee’s pension pots) and his daughter Grisly Maxwell – otherwise known as the sidekick – of infamous peodophile Jeffrey Epstein. 

She’s also vanished, by the way.


But can you forget the Equitable life pension scam?

A quick google search will tell you all you need to know about these historical scandals.

Source: Daily Mail

In more recent times there’s been Carillion, British Steel, BHS and Monarch Airlines.

The most recent example of a scam is Norton Motorcycles!

The list goes on and on.

IF you’re one of the millions impacted by these devastating pension scandals – you’ll be well aware of the consequences.

But these are historical pension scams that hit the headlines.

Knowing about these won’t prevent you from having your pension scammed today!

The ‘favoured’ scam of recent times (from 2010 onwards) are Unregulated Collective Investment Schemes (UCIS).

UCISs fall outside most financial ‘authorisation’ and ‘regulation’ because they’re difficult to define.

And once they are identified and instead classified as a Collective Investment Scheme (CIS); it’s usually too late! 

These are the ‘bad boys’ of investment scams (as of March 2020).

An example of a ‘land banking’ scheme from CityWire

UCIS’s cover a broad spectrum of ‘too good to be true’ investments that include:

Car parking spaces! (as far as Dubai)

‘Green’ climate change friendly things such as ‘teak forestry’ and ‘green oil’! (Doing your bit of the environment is a trigger)

Jatropha trees for green fuel! (tree investment in Cambodia)

Paraiba Projects Mini Bonds (Brazilian appartments)

Land Banking

Colonial Capital Group Corporate Bonds (12 % returns for scooping up leftovers from US housing market slump)

Loan Note scams such as Lakeview and InvestUS (Effectively pooled group pension funds providing loans but then loans aren’t repaid)

Carbon Credits (remember reducing carbon emissions?)

The list goes on, and on. And on. 


There are too many opportunities for scammers to entice those with pension fund money to invest. Offering returns with ‘guarantees’ of 12% plus is just too tempting for many.

12% sound good.

Who wouldn’t go for that?

Even 8% sounds unbelievable when interest rates are 0.1%.

That’s not ‘too good to be true’ is it?

And that’s exactly how hundreds (if not thousands) of eager ‘return seekers’ ended up piling into London Capital and Finance Group (LCF).

Mini-bonds anyone?

Source: BBC

Just Google ‘Scam London Capital and Finance Group’ for the full details.

The Financial Services Compensation Scheme (FSCS) is already paying out millions to cover this scam but cover won’t be available for many as current finance regulations don’t cover you if you decide (or are coerced) into investments that aren’t covered.

Unfortunately, for those that invested before LCF was authorised – NO compensation.

Likewise, if there’s no evidence of ‘advice’ and/or that funds came from any other account other than an ISA then compensation is also unlikely.

Just so it’s clear.

In the absence of advice you basically made your decision to ‘invest’ yourself.

You wasn’t ‘advised’.

This means if there’s no ‘suitability letter’ or ‘recommendation letter’ from an authorised and regulated ‘advisor’ there’s not going to be any help from the FSCS.

Understandably, there’s as much sympathy as lack of it within the investment community.

This scam harnessed ‘modern marketing’ (such as Twitter, Facebook and Google) to get return seekers (investors) to load up.

So was it ‘greed’ or ‘wishful thinking’ or plain deceit? Or a combination of all three?

How much are the social media giants in the ‘frame’?

There is growing pressure on social media platforms (such as Twitter and Facebook), as well as search engines such as Google to ‘vet’ advertisements aimed at investors to ensure they follow ‘financial promotion’ rules.

This is an uphill struggle because the lines and consequences of such monitoring eats into the profit margins of such businesses.

What comes after a ban on ‘ads’ for investing?

It’s simply too broad to apply in practice.


A Brief history of Pension Scams – If Somebody Offers You a Star – Say You Already Own one

In order to understand the current popular pension and investment scamming I’m going to use an analogy with buying a gift for somebody.

Did you ever know anybody that bought a ‘star’? 

I know this is a bit random.

But it’s the easiest way of describing the common type of UCIS investment/pension scam.

If you don’t know – buying a star- is a type of gift. Take a look on Amazon and you’ll find plenty offering you a part of the galaxy.

Once purchased, you receive a map showing you where your star is located within the Universe. And some very official documentation signed by an official somewhere.

Anyway, many of the UCIS pension investment scams (mentioned above) have been set up using a similar method.

I.E. Teak Wood plantations in Costa Rica.

Or car parking spaces or even storage units! 

And don’t forget the biofuel.

Yes, buy a plot (or a piece of the action) and you get a map which identifies your plot. 

You get official looking trust documentation. 

But the ‘thing’ you’ve bought into may just be a Scam. 

The only thing that might ‘stick’ is that if it’s held within a ‘dodgy’ Self Invested Personal Pension (SIPP) which is regulated.

SIPP providers are authorised and regulated by the FCA.

But there’s a problem.

A SIPP provider isn’t under any obligation to ensure whatever you decide to invest into is suitable, let alone whether it’s an outright scam.

In technical speak they’re ‘execution only’.

Complaining about ‘due diligence’ failings may carry some weight but unless there is a high percentage of ‘non mainstream assets’ held – it’s unlikely – that any action will be taken.

The FSCS and the FCA simply aren’t going to help you.

And IF you purchased the land in Costa Rica it’s pointless going there, because the land may be worthless!

And the scammers will have moved on, or at the very least made the ‘money’ disappear.


A Brief history of Pension Scams – So Why the Relentless Growth?

The big boy advisors (think of Quilter, Openwork, Brewin Dolphin, Tenet, St James Place etc etc) all benefit (indirectly) from pension scam investments.

Why?

Because ‘sales’ pitches (quite rightly) point out the many many terrible ‘scams’ that exist outside their pension savings/decumulation product offerings.

And fear is a powerful motivator. Especially the fear of getting scammed.

But they also pay the Financial Services Compensation Scheme (FSCS) levy, don’t they?

Yes, they do.

So, surely that’s costing them.

Yes. But the overall benefit (in fees and ongoing charging) they receive is much more than the levy they have to pay to the FSCS.

FREE SCAMCHECK HERE! (link to FCA website)

I must add in here (before the giants above get their legal beagles sniffers out) that I don’t believe this is intentional. 

The big advisor firms are not ‘knowingly complicit’ in the scamming saga.

It’s the ‘way it is’!

The changes to pensions law (around taking income) has had other unwelcome consequences (with scams being just one of these).

The underlying problem with pension and investment scams is the legal framework that’s in place.

This allows scammers to scam relentlessly without fear of consequences.

Try proving fraud!

And try finding the money once it’s offshore and managed in a number of jurisdictions in a spiderweb of trusts.

Try proving that something is a collective investment scheme masquerading as an unregulated collective investment scheme. 

But, where there’s a ‘will there’s a way’, isn’t there? And scammers are very good at this.

This is especially true if they keep funds separated (or as in the case of storage and car parking) have individual ground rents.

How’s that collective?

The key for the scammers is that they know if and when the Serious Fraud Office comes knocking at the door that nothing will link to them, the money will be gone and they are effectively ‘untouchable’.

Scammers are Untouchable?

Scamming is impossible to stop. 

You may try to stop ‘google’ ads or ban ‘Facebook’ ads that entice investors but the root of the problem is the legal framework. 

Until that changes pensions and associated investments will continue to be targeted on a massive scale.

If you was looking at 20 years ‘bird’ (prison) for drugs when the most you ‘might’ get is 2 years for something investment ‘fraud’ related – which would you choose?

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