Around 3,000 UK investors lost an average of more than £23,000 each
Around 3,000 UK investors were duped out of an average of more than £23,000 each in a devastating £70million investment fraud. Three men have been jailed after persuading members of the public to take money from their pensions and put it into a supposedly ethical forestry scheme in Costa Rica.
The average loss works out at around £23,000 per investor, based on the £70million fraud being divided between more than 3,000 victims. But individual losses varied dramatically, with some savers handing over far more than this.
The victims included many pensioners who had spent years building up their retirement savings, according to the Serious Fraud Office. The fraud was operated from a Bournemouth call centre, where members of the public were cold-called and offered a pension review.
Call handlers used false company names to gain victims’ trust before encouraging them to withdraw money from legitimate pension schemes and invest in tree planting in Costa Rica. The trees were actually planted – but there was a devastating catch. No money was set aside to maintain or commercially harvest them.
That meant the investment could never generate the returns investors had been promised. Instead, millions of pounds were used to fund the lavish lifestyles of the company directors. Matthew Pickard, 56, Stephen Greenaway, 47, and Paul Laver, 47, have now been sentenced to a combined 15 years and nine months in prison.
Pickard received six years, Greenaway five years and three months and Laver four years and six months. All three were also disqualified from acting as company directors for ten years. The SFO said Greenaway bought a £1.9million home while Pickard purchased a £4.3million property.
They also spent stolen money on high-end sports cars and luxury holidays, while £2.77million of investor money was diverted to administer a tax avoidance scheme for the directors’ own benefit.
Sarah Coles, head of personal finance at AJ Bell, said: “This case is a horrible reminder of how criminals can destroy people’s retirement prospects and why it’s so important to protect ourselves from scammers.”
She warned that the scam was a variation on a common theme in which fraudsters offer high-risk, unregulated investments while promising spectacular returns.
Five warning signs of a pension scam
1. Someone contacts you out of the blue
An unexpected call, email, text or social media message offering a pension review should set alarm bells ringing. Cold calling about pensions is not permitted under pension regulations.
2. You are promised early access to your pension
Anyone claiming they can help you access pension money early should be treated with extreme caution. This is a major warning sign of a potential scam.
3. You are promised huge or guaranteed returns
Promises of sky-high or guaranteed returns, particularly over a short period, are another major red flag. There is no such thing as an investment offering enormous returns without risk. And don’t assume an investment is safe simply because it sounds respectable or environmentally friendly.
4. The firm is not regulated by the FCA
Check independently whether anyone offering you pension or investment advice is authorised by the Financial Conduct Authority. Do not simply accept a caller’s claim that they are regulated.
Fraudsters can impersonate genuine companies, so check the FCA register yourself and use contact details obtained independently.
5. You are pressured to act quickly
Being told you must invest immediately or risk missing out is a classic scam tactic. Don’t be rushed into moving pension money. Take time to investigate the company and investment, talk to people you trust and consider speaking to a regulated financial adviser if you are unsure.
You can also use the Government-backed Pension Wise service for guidance on your retirement options.
