Consumer group calls for action on super scams
The Federal Government is being urged to introduce a superannuation industry anti-scam code.
How the scammers operate
There are two common types of super scams:
A criminal tricks a fund member into transferring their super to them as a scam investment, either via establishing a self-managed super fund (SMSF) or – for retired members – transferring directly from their super account. The scammer then steals their money.
Early access scams, where a scammer induces a fund member to withdraw their super early illegally. The scammer may charge a high fee for this service or use the information-gathering process to steal the victim’s personal details and take their money.
There are also cases of fraud where a thief gets access to someone’s super account without their knowledge or involvement, for instance through a hacker stealing personal details from online databases.
Scamwatch advises, “Never give any information about your superannuation to someone who has contacted you. Don’t let them try to pressure you to make a decision immediately, take your time and consider who you might be dealing with.”
Report scams by contacting your super fund, visiting the Scamwatch website, or contacting the Australian Tax Office on 1800 467 033.
Advocacy group Super Consumers Australia is urging the Federal Government to introduce a superannuation industry anti-scam code.
The group said such a code would prioritise the safety of Australians’ 24 million retirement savings accounts, which are worth billions of dollars.
Super Consumers Australia says since 2022, up to 178,000 superannuation members across three super funds have been at a heightened risk of phishing scams due to known super fund data breaches.
A phishing scam involves a scammer sending fraudulent emails or text messages designed to steal a person’s personal or financial information.
Corporate data breaches lead to an increased risk of phishing scams because they expose members’ contact details and other information.
Heather Gray, the lead ombudsman for superannuation at the Australian Financial Complaints Authority (AFCA), told Super Consumers that superannuation funds have fallen behind the banks in their ability to detect and prevent scams and fraud.
She urged funds to continue improving their scam prevention systems and to collaborate on a “shared understanding… as to what measures will be taken and to make sure that as far as possible, systems are strengthened so that it’s very difficult for scams or frauds to get through”.
According to Ms Gray, the level of scam prevention at super funds varies widely.
If a member complains to their fund about a scam and the fund doesn’t resolve the matter to their satisfaction, they can then take the complaint to AFCA.
AFCA can order super funds to repay the victim where the fund is liable for the loss.
“We would look at the whole of the circumstances and then assess whether the [super fund] acted fairly and reasonably in not compensating the member for the loss they suffered,” Ms Gray said.
Rebekah Sarkoezy, policy manager at Super Consumers Australia, said funds should be held to a much higher standard through the establishment of a mandatory super industry anti-scam code.
She said the absence of an industry anti-scam code is leaving consumers without redress if they do have their super stolen and claims there are some super funds who refuse to take up even the most basic account security controls like multi-factor authentication.
“A super anti-scam code would give the industry the clarity and incentives it needs to lift its game on scam prevention,” she said.
Related reading: Super Consumers Australia, Choice, AustralianSuper, Scamwatch
