Australia QROPS – Scammers Set To Strike

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Written By Hossein Soltani

A sad fact is wherever scammers sense easy money; they get set to prey on the unwary.

The Great Australia QROPS Disaster looks like a happy hunting ground for these fraudsters offering a quick fix that does not exist to thousands of retirement savers worried about what will happen to their cash.

Spotting a scammer is easy.

Spotting a scammer

The likely scenario often goes like this –

  • You are contacted out of the blue by a ‘financial advisor’ offering a free Qualifying Recognised Overseas Pension Scheme (QROPS) review.

    The initial contact comes from a cold-call text, email, letter or telephone call.

    The contact looks and sounds official, but the advisor or the firm they represent is based offshore.

  • The adviser offers you a quick fix to your QROPS problem – often incentivised by a discount or other limited availability benefit, like a reduced fee to make you sign up as soon as possible
  • Paperwork is hard to come by detailing fees, where your cash is going and what type of investment is involved
  • Often the investment is characterised by a high-risk, unrealistic return

Staying within the rules

If you are contacted by your Australia QROPS options by someone you do not know the best course of action is to take their details and turn down the opportunity.

The main reason is Australian pension rules do not allow anyone without the appropriate qualification and authorisation by the Australian Prudential Regulation Authority to give QROPS advice to Australian residents.

If you are transferring pension relieved contributions out of a QROPS to another pension, this has to be a scheme authorised by HM Revenue & Customs (HMRC) – and if it is a QROPS it must be detailed on the latest official QROPS List at the time of the transfer.

The risk is QROPS savers can lose a lot of money by taking advice from a scammer.

Not only can HMRC deem a transfer ‘unauthorised’ and chase a tax charge starting at 55% of the value of the pension transfer, but the cash flowing to an offshore scammer can disappear in dubious investments or extreme charges for advice.

You can check out an authorised adviser on the Australian Prudential Regulation Authority web site.