80% of overseas pension transfer requests fraudulent

Around 80 per cent of overseas pension transfer requests are fraudulent, according to new research from Aegon.

The company has prevented roughly 80 per cent of transfers to Qualifying Recognised Overseas Pension Schemes (QOPS) this year to date, after customers had unknowingly authorised them without realising they were fraudulent.

QOPS are used when British residents want to emigrate and transfer their pensions to their new country, and are seen as a legitimate way to move funds. However, in recent times they have been marketed by unregulated firms who transfer the money outside of the UK and take a specific amount to cover administrative costs.

When the funds are overseas, the victim risks losing all of their personal savings or, if they are not gone for good, face a hefty tax bill of 55 per cent as well as other fees linked to the pension being moved abroad.

Fraudsters are specifically targeting small pension pots of under 30,000 pounds, with the promise of conducting a review before transferring the money abroad.

Aegon UK regulatory strategy manager Kate Smith noted that relaxing the pension regulations have provided people with a greater choice regarding accessing pensions, but that it had also allowed scammers a way of defrauding pensioners.

She went on to say that fraudsters were both plausible and highly persuasive so it could be easy to all for their scams, pointing out that even people under the age of 55 were being targeted.

Smith urged all customers to be more aware, vigilant and fully understand what they were getting into before signing any documents. She also insisted that they were determined to protect them and crack down on the increasing number of fraudulent cases.