The City of London Police have today begun a major crackdown on pension liberation fraudsters by dismantling a suspected organised crime gang believed to be cold calling and text messaging pension holders across the UK with illegal offers that could ultimately destroy pension plans.

Detectives from the National Lead Force for fraud entered a London office housing 40 call operatives, and arrested three men, also seizing a number of computers and documents. Police Scotland and SOCA arrested two men in Ayr and in Glasgow with arrests also being made in Cheshire.

Police had been alerted to the situation after there was an increasing number of reports to the Action Fraud hotline of people losing pensions after being persuaded with better returns and tax free advantages to release savings.

According to the Information Commissioner’s office, the number of spam text messages related to reclaiming pensions have more than tripled in the past six months, and one in eight spam messages sent in March have related to pensions.

City of London Police commander Steve Head said: “Pension liberation fraud is the new boiler room fraud phenomenon as fraudsters seek to exploit new opportunities thrown up by the changing economic climate. The promise of maximising returns on your pension savings may seem to make good financial sense but the reality is you could be falling into a terrible trap which has the potential to destroy your retirement.

“People should think long and hard before releasing pension funds early and anyone who is cold-called or text messaged with this or any other type of investment opportunity should put the phone down and not reply to the message.”

Minister for pensions Steve Webb said: “The promise of easy money when times are tough is all too tempting, and there are far too may unscrupulous people who will play upon this. If you are offered a deal to unlock your pension, don’t touch it.”

HMRC stated that it is “committed to combat pensions liberation through a very active compliance programme and working closely with other regulators to detect, deter and disrupt pensions liberation activity.” It added that “over half of an individual’s pension savings can be made up of tax relief, so tax charges of up to 55 per cent apply if people break the tax rules about how and when they can access their savings.”

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