One of the worst things about cybercriminals is that they often target vulnerable people. Just as young people just starting out in life are often targeted in crypto scams, people who are close to retirement age are often approached by those who run pension scams.
They are often told they can expand their retirement nest egg if they take the funds and transfer them into high-yielding trades. Unfortunately, many people fall victim to pension scams and put their life savings at risk.
Pension scams have a similar pattern to other types of frauds, such as forex trading scams and crypto scams. These scammers often use cold calls or email or text spam to convince people to make lucrative trades. They may guarantee that the person can access their pension funds early with no or little tax penalties or claim they can increase their returns by double digits.
Unfortunately, once people have discovered that the broker or the scheme is not legitimate, the scammers have already made off with a sizeable amount of their pension and they are stuck having to pay high taxes or penalty fees for early withdrawal. It is therefore important to recognize the signs of pension scams and to avoid pitfalls that can put your savings in danger.
What Are Pension Scams?
Pension scams, as the name indicates, are frauds that attempt to persuade people to redirect funds from their current retirement account into a scheme that they believe will make them more money. Some pension scams also are like forex trading scams and deal with new traders who want to grow their nest egg.
The difficulty caused by these scams is not only the money that they steal, but the fees and taxes they cause people to pay. According to most pension plans, whether they are government-run or private, if there is an early withdrawal from the fund, there are high penalty fees. In addition, the person will have to pay high taxes on money they will not even benefit from, because the scammer will take it from them in a fake trade.
Pension scams are often seen as more pernicious than regular forex scams or crypto scams because they steal from people the source of their long-term security. The cruelty involved in this is immeasurable and many of the victims of pension scams will lose everything they worked for.
The good news is that there are experts in various forms of fund recovery, including wire recall and chargebacks. Broker Dispute deals with many clients who have all but given up hope tracking down the scammers and getting their money back.
We have counseled and assisted clients through difficult situations, and there is hope. The key is to be well-informed about fraud and avoid this danger in the first place.
Anatomy of a Pension Scam
No two pension scams are exactly alike, but they often contain uncanny similarities. A typical fraud begins when a person over the age of 50 receives a phone call or a text or email from someone they don’t know. This person may claim to be a broker who can help them create a better alternative for their retirement funds through high-yielding trades that will maximize returns.
They will urge the victim to act immediately and to transfer the funds from their retirement into this new account. The person will say they have to act within 24 or 48 hours and will guarantee extremely high returns.
When the victim asks about taxes and fees they will have to pay, the scammer will tell them that there are ways they can get around the fees and reduce the taxes if they act now and follow their advice.
When these funds have been transferred into an account, often by the scammer demanding bitcoin or gift cards to avoid detection, suddenly the victim will no longer hear from this broker. They will disappear without warning. It is at this point that people realize that they have been the target of a pension scam.
Warning Signs of Pension Scams
The story above is devastating but unfortunately happens to many people each year. However, many people can avoid these pension scams before they even start by paying attention to the following warning signs and staying away if they see any of the following:
- Cold calling or spam
- Extreme time pressure
- Claims of incredible returns
- Promises that they will not face high fees or taxes, despite what they have been told about their retirement fund
- Claims to be a broker but is not regulated
- No or limited ability to contact them
In some areas of the world, people are not allowed to contact people out of the blue with schemes that involve withdrawing money from retirement accounts. Signs of a scam involve the promise of extremely high returns and a very short time frame during with the deal can take place.
People who claim they know loopholes around capital gains or penalty fees are usually giving false reassurances. If someone says they are a broker, ask for their license. There should be several ways of contacting them. Often those who operate forex scams, crypto scams, and pension scams have sparse or incorrect contact information.
What to Do if You Have Lost Money in a Pension Scam
Just as you would report a bitcoin scam or a forex scam, it is also important to stand up for your rights and file a complaint about a pension scam. Act quickly, because those who run frauds tend to hide their identities. There is a good chance of fund recovery if you work with professionals such as Broker Dispute.
Are You the Target of a Pension scam? Talk to Broker Dispute Experts
If you are a victim of a pension scam, speak to Broker Dispute experts. We provide clients with solutions and can help them file a claim, track down the scammers, and work towards fund recovery. Our professionals know how to get results for our customers with our connections and experience with law enforcement and government organizations. Consult with us and we will take care of the rest.