Moving abroad for work, family or retirement can be exciting. However, many expats have fallen victim to scammers who target foreign residents. It’s no secret that emigration can leave you vulnerable, mostly because you’re out of your comfort zone and without a good grasp of the new country’s financial rules.
Christopher Nye, senior editor at Smart Currency Exchange, highlights five financial scams linked to emigration. We take a look.
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1. Emigration property scams
It’s not uncommon for property buyers to fall victim to a dubious developer or property seller, especially in a new country. They lure you into buying a property with issues. These include properties built without the necessary permissions or properties given planning permission by corrupt officials.
To avoid this, be sure to use independent property lawyers and reputable and experienced international payments specialists. Doing so can offer peace of mind and some level of assurance.
2. Visa scams during emigration
The visa application process can seem long, especially if you’re rushed. Added to this, cases of rejected and refused visas are relatively common.
Of course, you might not meet the eligibility criteria for all visas, leaving you with the option of investor and golden visas. These visas help you gain residence in a particular country after buying a property over a certain value.
Criminals target desperate emigrants, offering them seemingly cheap and easy ways to get a visa. Don’t be fooled. The best way to avoid scammers is to use the proper channels, even if you feel the process might take longer.
3. Emigration investment scams
Christopher Nye states that investments in the UK are bound by FCA rules. Expats living abroad and making investments not covered by the FCA rules could be at risk.
With interest rates on savings being so low, investment proposals promising higher returns can be tempting. While some are no doubt genuine, it’s still possible to fall victim to a scammer. In this case, the solution could be to do your due diligence and seek the help of a reputable local independent financial adviser before pursuing a proposal.
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4. Pension scams
Pension scammers show no remorse and will destroy your retirement plans. Mark Steward, executive director of enforcement at the FCA, advises those nearing retirement to be ‘ScamSmart’. He recommends being vigilant and rejecting any approaches offering ‘help’ with pensions. Instead, he says it’s important to get advice from an FCA-authorised firm.
Christopher Nye adds that it’s important to watch out for overseas schemes that start by asking for pension reviews. Scammers will try to entice you with the fact that you can take 25% of your pension tax-free and invest it in low-tax, high-reward schemes.
The risk is that before you realise you’re getting scammed, you will have transferred your pension to an offshore account and lost it to scammers.
5. Money transfer scams when buying property abroad
Be wary of fraudsters who pose as an overseas property buyer’s lawyer or notary. FCA-authorised currency traders are required to follow strict rules when making transfers. Even with this as the case, don’t assume anything. Always confirm the bank details with your solicitor before sending any funds.
