It is hard to get accurate data on the extent of pension fraud, but it is certainly a serious problem. Which.co.uk research showed that the average loss for those affected is £82,000. The factors it identified as making people vulnerable included accepting cold calls (23%); interest in pursuing high returns in esoteric investments (23%); gaining access to their pension early (17%); and seeking guaranteed returns (13%). These are definitely things to avoid however, there are other signs to help you spot fraudulent investments. Start by looking out for unrealistic returns or advisers pretending that risks don’t exist. No investment can avoid the constraints our global system places on investments.

The highest return you can reasonably expect is 7 to 8% a year, but this means you will be exposed to 100% stock market returns. In a bad period, an investment such as this could fall by 30 to 50%. Anyone who promises you returns at this level or higher without high risk is probably lying. Next you should investigate the people. They should also appear on the FCA register as regulated individuals and their career history will be detailed. There are a couple of other shortcuts that can help you.

A well-known and profitable company has a lot to lose from bad practice and is therefore unlikely to do it. Where there isn’t a recognised brand you can always ask to visit their office. You should expect to see an established operation and many full-time members of staff. Most fraudsters will either be very short-term operations where your money disappears with the people involved or they will be longer-term but offering unrealistic returns by using new money to pay off old investors (effectively a Ponzi scheme). If you can spot these signs you should be able to avoid most scams