As an adviser I frequently read in our trade press articles about the next group of innocent people being scammed out of their hard-earned savings. But recently these cases have hit the mainstream press. The BBC website carried an article in January about a group of ‘scammers’ who have been successfully pursued via the courts to pay back the monies they stole from pension savers who had been duped into investing into ‘Truffle Trees’ of all things. Of course there is an open debate as to just how, or indeed if, the scammers will repay the money.

But what is a scam? Well, some say in its simplest form it is often just an offer that seems “too good to be true”, which sadly in many cases it is. But there’s more to it than that; it’s about opportunities that come out of the blue as a result of a cold call or a chance meeting in a pub. It’s about investments that you have never heard off or perhaps would never normally consider. And it’s about being promised a return that is wildly above anything else that you can get from a bank or building society account for a supposedly safe investment. And importantly it is something that will almost certainly mean losing all of your investment with or no realistic chance of getting it back.

So why are people attracted to these scams?  In the world of pensions, it may be as simple as feeling your pension is insufficient for your retirement but you can’t see a way of improving the position. Out of the blue you get a phone call promoting an “investment opportunity of a lifetime” in a safe asset returning upwards of 10%  per year. You might even be offered a kick-back on the commission the ‘adviser’, and I use that expression loosely, receives thus providing you with a few pounds in your pocket to enjoy life with. It’s such a lovely story how could you refuse?

The truth is that the people promoting these are not authorised to give advice and they are placing your money into unauthorised investments which are not covered by the Financial Services Compensation Scheme. In many cases the investment doesn’t even exist. These people living life to the full on your money, in doing so, they are destroying your financial future. So beware of anyone phoning out of the blue telling you how good the returns on ‘Truffle Trees‘ are going to be or that the property development in some far off idyllic holiday destination is the best investment idea going. Don’t fall for the headline returns; they just don’t exist and remember the old adage “if it seems too good to be true, it probably is”.

And if you’re in any doubt, or tempted by these claims, speak to professional advisers such as ourselves for a second opinion before doing anything you might later regret.