Now scammers target redundancy pay

Jonathan Watts-Lay, Director – WEALTH at work

Given the many recent redundancies announced, it is inevitable that as coronavirus continues, more redundancies are still likely.

Scammers often see turbulent times like these as an opportunity. Unfortunately, employees that receive a lump sum of money through redundancy pay can be particularly vulnerable to being targeted. For example, the BBC reported on a case where fraudsters had taken £25,000 from a doctor’s redundancy payment and pension savings, and Surrey Police has issued a warning about investment fraud after a woman looking to invest her redundancy payment was scammed out of £275,000.

To help employees avoid losing their redundancy pay to fraudsters, we have highlighted the common mistakes individuals have quoted when falling for a scam;

  1. “They looked so professional” – Scams look and sound legitimate, which is why people are hoodwinked. They often have very professional looking websites and literature that can make it hard to distinguish from the real thing.
  2. “It was a once in a lifetime opportunity” If an investment offers the opportunity of a lifetime, employees should be very suspicious. If it seems too good to be true, it probably is.
  3. “They seemed so friendly and knew so much about me” –The people that run scams are clever and may have been able to get hold of an individual’s personal details. Employees should be aware to not let their knowledge and friendliness catch them off guard.
  4. “If I didn’t decide quickly the opportunity would be lost” – Genuine advisers will never rush individuals to make a decision. Anything that talks about limited time offers is likely to be a scam.
  5. “They said they could help me to access my pension early” – When made redundant, some employees may want to access their pension savings. Pensions can normally only be accessed after the age of 55, unless in cases of seriously ill health. In normal circumstances, if someone promises to release a pension early they are lying and it is a scam. Employees need to make sure they know the facts to avoid the fraudsters.
  6. “I didn’t know how to check them out” – Whatever employees are planning to do with their redundancy money, they should check that the company is registered with the Financial Conduct Authority (FCA), as if they’re not, it’s probably a scam. The FCA’s financial register can be found here
  7. “They kept contacting me and eventually I just gave in” – Scammers will use technology and try to contact individuals through various means such as social media, texts, telephone calls and emails. If in doubt, they should ignore it and hang up the phone or delete the message. Phone companies should be able to help by blocking any offending numbers and email providers can help to block emails from specific senders. Individuals should be aware of what they share through social media and check that their privacy settings are as secure as possible.
  8. “I didn’t report the scam straight away” – If employees think that they are being scammed, they must report it on the FCAs Scam Smart website and to Action Fraud Not only may they be able to help them, but they will be able to help others from falling for the same scam.

Jonathan Watts-Lay, Director, WEALTH at work, comments; “While redundancy can be a really stressful time, a difficult situation can be made worse by unscrupulous fraudsters who won’t think twice about scamming individuals out of their redundancy pay.”

He adds; “This money is a lifeline for many and it is crucial that employees are protected from making disastrous mistakes when they are most vulnerable.”

Watts-Lay concludes; “It is absolutely crucial that employers put in place robust processes including financial education, guidance and regulated financial advice, to help employees make the most of their redundancy pay and to protect them from making what could be very costly mistakes.”

Source link

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *