SUPERANNUATION SCAMS AND THE FAMILY HOME

We’re often asked by ADF members about how to gain early access to the increasing amount of money in their superannuation accounts. The reasons offered for wanting to withdraw or transfer part or all the money include paying down urgent debts, buying a car and more recently, funding a deposit or outright purchase of a family home.

What’s sometimes overlooked by members in their enthusiasm to access the money is that the principal purpose of the superannuation system is to fund retirement. Therefore, the opportunities to legally withdraw funds in advance of that event are limited.

Nevertheless, it’s understandable that as balances in the superannuation system grow, some members will conclude that their immediate housing needs are more important than an unimaginable retirement event thirty years or more down the track.

As a result, they may become susceptible to sales pitches from scammers who offer to withdraw superannuation money or transfer it to a self-managed superannuation fund (SMSF) to enable access to the funds.

Superannuation scammers target members online, by phone or by email. They do this by:

• Phishing, in which a scammer contacts you claiming to be from a financial organisation, such as a bank or superannuation fund. They may use copied legitimate licence details to give their target the impression they are genuine.
• They ask for your personal details and may send an email with a link. When you click on the link, they will gain access to your computer, including log-in details for accounts. With this information, the scammer can create a bogus superannuation account in your name and transfer your money to the new account and then withdraw it; or they can use stolen myGov details to access your superannuation accounts and steal the contents. You can read more about these types of scams on the Australian Taxation Office (ATO) website.
• Other scammers will offer you help to gain “control” of your superannuation by assisting you to set up a SMSF and then transferring your superannuation money into the new fund which they will “help” you to manage. This is often quite a subtle scam because it relies on time and building trust. Eventually, the scammer will convince the victim to transfer the SMSF balance into another fund that the scammer controls and from which the money is stolen.
• Another common scam is where the scammer offers the target a quick and easy way to access superannuation early. They will often assist members, some of whom may be desperate to get hold of the money, to complete genuine documents that are necessary to legitimately gain access. The process may include suggesting the transfer of funds to a SMSF, for a (large) fee. And they may inform you that once the paperwork is lodged that the money can be accessed for personal use. This process is illegal and will result in the victim paying additional tax and penalties. You can read more about illegal early access schemes at the ATO website.

We have written previously about the pros and cons of SMSFs. You can read more about superannuation scams involving SMSFs and real estate on the ATO website.

How can you protect yourself from superannuation scams?

There are seven steps:

1. Regularly check your superannuation account for any unusual activity or transactions.
2. Update your account security (consider multi-factor authentication if offered by your superannuation fund) and make sure your fund has your up-to-date contact details.
3. Contact your superannuation fund directly if someone contacts you claiming to be acting on behalf of the fund. Don’t rely on the contact details the caller gives you as they may be fake.
4. Know the superannuation rules so that you’re well informed should a scammer approach you to offer an illegal early access scheme.
5. Speak to a trusted person before making a decision about transferring your superannuation balance to another fund. This person could be a family member, an accountant, or a licensed financial adviser. You can learn more about choosing a licensed financial adviser on our website.
6. Never deal with anyone who is not licensed. You can check if someone is not licensed or has been disqualified.
7. Be aware of the need to avoid identity theft by, for example, taking care of what you share on social media. You can read more about identity theft and fraud on the website of theOffice of the Australian Information Commissioner.

Reporting a superannuation scam

If you think you’ve been targeted by someone who is trying to access your superannuation, we encourage you to report it to:

• Your superannuation fund
• Scamwatch
• the Australian Taxation Office Superannuation Line on 13 10 20.

More information

ASIC’s Money Smart has more information on what to do if you’ve been scammed. Our website has more information on scams.