Pensioners warned over forestry investment scam
Investors are being urged to be wary of a new pension fraud claiming to offer high returns for investing in forestry schemes.
Fraudsters are cold calling victims and persuading them to transfer their pension from legitimate schemes into unregulated forestry investments schemes, which offer questionable returns.
According to Action Fraud, the national fraud and cyber crime reporting centre, 26 per cent of investment fraud victims last year reported falling prey to such a scheme.
The scheme works by contacting people approaching retirement age and encouraging them to participate in a pensions “review”. As part of this review the caller will try to sell forestry investments as a growing, high-return area.
Victims are persuaded to withdraw their savings from legitimate pension schemes and put them into an alternative pensions company, then invest 25 per cent of that into long-term forestry schemes.
The schemes cover everything from teak plantations in Costa Rica to Christmas tree and bamboo plantations around the world.
Once a victim has been persuaded to invest, they will continue to receive cold calls asking them for an upfront fee; requesting insurance payments and encouraging them to set up regular payments to receive an even greater return.
According to Action Fraud: “Victims have found they do not have easy access to their forestry investment, or have experienced a reduced return rate. The practicalities of the forestry investment are not explained thoroughly, for example the length of time taken for trees to mature is dependent upon many variables which would affect the return rate for investors.”
The Financial Conduct Authority has launched a new campaign encouraging anyone considering an investment to check its ‘Scamsmart’ website and seek independent financial advice from a regulated professional before going ahead.
Action Fraud has issued a series of pointers to protect yourself from investment fraud:
Be suspicious of all unsolicited calls. Cold-calling for investment business is illegal, so reputable brokers will not do it.
Do not give out personal or financial details and never agree to anything or send money upfront without making your own enquires into the company first.
Make some enquiries by checking whether the company is regulated on the FCA register or calling the FCA on 0300 500 5000.
Ensure you request that the risks and growth rates are explained and you fully understand them before transferring your pension.