Pension Scammers Caught

Four scammers who conned pension savers out of £13.7 million have been banned from the industry and banned from being company directors or trustees. The Pensions Regulator has launched a criminal investigation as these people need to be jailed for swindling so many out of their life savings.

David Austin was the leader of the group and he and his family took most of the proceeds.

The money was spent on lavish living – and only £3.2M of the cash taken was actually invested in anything and that was a risky venture.

David Austin is a former bankrupt with no experience running an investment business, but conned people into investing with him.

The scam starts with cold calling and websites set up to lure pension investors. The scammers created a series of bogus investments including one about growing truffle trees and one about a Caribbean holiday site.

The victims were told their pensions would be reinvested and they would be paid an upfront cash lump sum for making the transfer. They were also lied to that their funds would be put into assets, bonds and HMRC-compliant investments to meet the target return of 5% growth a year.

False documents were used to trick staff at the schemes where the victims had their pensions – into believing that the pension holders worked for companies linked to the scam schemes. This meant the staff were persuaded to allow £13.7 million of funds to be transferred to the scam schemes.

David Austin installed fellow criminals Alan Barratt, Susan Dalton and Julian Hanson as the trustees for the scam schemes and they were then paid to act on his instructions, allowing the scheme monies to be used at Austin’s will. Barratt and Dalton also acted as salesmen for Austin’s Spain-based business, Select Pension Investments, persuading victims to transfer their pension pots into the schemes.

A small proportion of the funds – between 10% and 25% of the amounts transferred – were given back to the victims as their “rebate”, although many victims were assured that this payment was coming from the investment provider not out of their pension pots. More than £1 million was paid to “introducers” or “agents” who used cold-calling to encourage pension members to transfer over their funds.

More than £10.3 million was transferred to businesses owned or controlled by Austin,

A whistle-blower contacted The Pensions Regulator about the scam in November 2014 who then took control of the schemes to prevent further money being removed.

If you have any experiences with scammers, spammers or time-waster do let me know, by email.

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Engaging Works

This is a new set of Internet services at https://engaging.works created by Mark Price, the former Managing Director of Waitrose and Deputy Chairman of the John Lewis Partnership. He says that driven by his belief in the potential of happier employees to transform businesses, he has developed a set of simple tools for companies and individuals to use.

The most popular of these so far is the happiness survey.

It’s quick and easy to fill in and measures your happiness level at work compared to others in similar industries.

Marks believes the key factors for happy employees are:

  1. Job satisfaction
  2. Information Sharing
  3. Fair reward and recognition
  4. Empowerment
  5. Well-being
  6. Instilling Pride

There is also a career developer tool, mentor matching, online chats, messenger and more

Mark has big plans as he wants to challenge Facebook and others and he starts out with a belief that the customer’s data belongs to them not to him (unlike Facebook).

We’ll see how well he succeeds as he develops more tools in this market.

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Stupidest Scam or Spam of the Week – Impossible Loans

Lots of scam messages offer loans of various kinds as an enticement.

The more intelligent ones offer loans tied to circumstances and ability to repay etc. so as to make them more believable.

But there are other scammers who take the opposite view and offer loans for anything, with no collateral and at virtually zero interest. These are very obviously scams but still some people fall for them in their desperation to get an affordable loan.

A latest set of such scam messages appear to come from Poland (i.e. the domain suffix is .pl)

The title is something like “Your Bank Says No”.

Then the message goes on about how banks regularly turn people away or charge too much.

The link you are invited to click on (labelled as preliminary verification for a loan) is of course to a phishing site. The whole point of the email is to get your personal details so they can used to hack your accounts and/or sold to other scammers.

The email sender is tktelekom.pl which is a non-existent company and obviously a Telecomms name not a bank.

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New Banking Code on Fraud

Authorised Push Payment (APP) fraud is where a fraudster convinces the victim to transfer money to them, usually under the guise of an authority, the victim’s bank or a supplier. Once transferred, the money is likely to be transferred again and then difficult if not impossible to retrieve.

Traditionally the banks have treated these frauds as being the victims own fault and normally refuse to provide reimbursement. However many of these frauds are very sophisticated and difficult for the victim to know they are being defrauded until it is too late.

Also, the banks practice of simply following instructions and sending money to anyone at any account without any checks means they do little to prevent these frauds and often act too late after they are informed of a problem and the money and the fraudster are gone.

A new draft voluntary code for banks aims to make it more difficult for the perpetrators of these frauds and more likely for the victims to get recompense.

The new code establishes the principle that if customers take “the requisite level of care”, they should be reimbursed by their bank.

However, the code does list eight ways that banks can justifiably refuse to reimburse customers who have been defrauded. These include cases where customers:-

  • refuse to heed warnings from their bank
  • “recklessly share” their security credentials
  • fail to take steps to make sure they person they paid was who they thought they were
  • fail to be honest with their bank
  • are “grossly negligent”
  • fail to heed a confirmation of payee result (see below)

Questions also remain about who is liable when both the bank and the customer appear to have taken all the necessary steps to prevent fraud.

Customers were scammed out of £503.4m between January and June, according to the finance industry’s own research.

Favoured methods include duping victims into paying in advance for a product or service that doesn’t exist or impersonating a trusted organisation such as the police.

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