Superannuation fraud involves false claims made by a criminal in an attempt to steal money from an individual’s superannuation account. The possibility of superannuation fraud increased greatly during the pandemic as the requirements temporarily changed. Uncertainty was high about what people could and could not do and this caused a lot of confusion, which fraudsters benefited from. In 2020, one superannuation fraud scheme cost Australians thousands of dollars. Since then, fraudulent activity has remained high. This is why it is crucial to know what superannuation fraud may look like and how to avoid it. 

Types of superannuation fraud

Fraudsters have developed new sophisticated methods for targeting their victim. Usually, they are aware of their demographic data and use that as a way to approach them and make their attempt seem authentic. Superannuation fraud does not only affect individuals but organisations and governments. If victims are tricked by criminals claiming they work for a company or the government, it can ruin the trust they have for them and slowly impact their reputation.

Some types of superannuation fraud include:

  • Phishing
  • Telephone calls
  • Suspicious ads
  • Malware

Phishing

Phishing scams can take many forms and are one of the main ways superannuation fraud is committed. An email or SMS might be edited to look legitimate. They could have claims such as ‘Access your super now!’ or ‘The government is allowing you to access your super early’. If these emails and SMS have links, then it is really likely that they are trying to direct the individual to a page where they can steal their personal information.

The criminal is trying to find a way to authorise the transfer of the victim’s funds into their self-managed superannuation funds (SMSFs). After the transfer, it might not be possible to get the money back. On top of the losses, the individual may also have to pay extra taxes for withdrawing funds early.

Prevention

Individuals need to be aware of ‘early release’ schemes and communications sent with false promises. Any promise that people can get money early, especially without consequences, is very likely to be superannuation fraud. Staying up to date with the latest news and reading new requirements carefully can help in reducing the likelihood of being tricked into a scam.

If a link asks you to log on to myGov, you should not use the link. Instead, look up the website on the search bar and enter your details in the real myGov. The link may be providing people with an authentic-looking government website while trying to steal personal data. This strategy should also be used for logging into your superannuation account.

Individuals should also restrict what they post online as the more they share, the more likely it is that they will be targeted. Fraudsters will have all the details necessary to contact them and create a realistic email or SMS to convince them to click the link.

In a company setting, it is advisable to set up a reporting system if a staff account has been compromised. This will notify the IT team and consequently, the rest of the staff members which will prevent further employees from being affected.

superannuation fraud

Telephone calls

Superannuation fraud can occur through the phone when fraudsters try to contact individuals by calling them and pretending to be a government or superannuation company representative. They could ask the victim to provide them with their personal information so they can fill out a form or pretend that they need to do an identity verification. That way they are able to collect all the necessary details to try and create a personalised attack.

Scammers will usually not identify themselves or give a false identity. The reason they are calling may be unclear or it might be for a form the customer never submitted. They might use this tactic to trick the person into sharing sensitive details such as their membership number or TFN. They might say that they noticed suspicious activity and ask the individual to identify who they are.

Prevention

Consumers should always try to verify who they are speaking to. Just because the person on the other end is claiming to be from the government it does not mean they are. They should avoid giving sensitive information such as financial details over the phone.

Be wary of people informing you of an application or something ‘urgent’ you need to respond to quickly. If you did not authorise an activity then go online and check if there was suspicious activity or if the claims are just false. Do not be afraid to ask more questions if you are unsure about the legitimacy of the caller. It is better to be safe than sorry.

Hang up if they refuse to provide their license. To look up if people have been licensed or disqualified, you can look here. 

Companies and governments should establish clear policies that outline how they contact their clients and what information they will ask from them. For example, they might highlight to consumers that they will never ask them to share sensitive information over the phone. They might also highlight that they will not ask for username or passwords so customers know how to recognise scammers from genuine calls.

Suspicious ads

Unsafe websites can contain unsafe ads that are making unrealistic claims. They could be promoting ‘Superannuation with high returns’ or ‘Small contribution, high profit’. Similar ads, promising something with no obvious risk, indicate that it is probably superannuation fraud, encouraging individuals to click on them and get scammed. Upon clicking on the ads, victims are faced with a fake page that promises them an increase in their superannuation if they transfer the money over to them.

Prevention

Before trusting a superannuation advertisement, it is wise to do some research and see if there are any reviews confirming the legitimacy of the company. Is this company reviewed by real people? Is this company registered? Instead of clicking on the ads, look up the company manually, especially if the website seems unsafe. People should be wary of overly positive ads and check if a company is registered before they make a decision.

Malware

Emails or SMS may contain materials that urge the recipients to download them. When they do so, malware is downloaded into their device that is able to collect information and take control over their account. To convince them to download such documents, scammers pass them off as guides on how to pay debts using their superannuation or how to access their money early.

They might also present it as a form they have to fill out to see if they are eligible for a new government scheme.

Prevention

Device users need to have a reliable antivirus that will protect them from this type of superannuation fraud. They should not download documents that sound too good to be true. It is important to scan files like these to prevent sensitive information from leaking.

Checking your superannuation balance regularly can help identify any fraudulent activity early.

One of the best ways to avoid this type of superannuation fraud is to set up mandatory training that employees can complete to recognise different fraudulent activities. If an employee has fallen victim, it is likely that it will affect their mental health and wellbeing, as well as other employees within their team. This is because their device is not under their control anymore so the scammers can approach more staff members unknowingly.

Conclusion

Superannuation fraud, either attempted or successful, should be reported to your superannuation fund and a complaint can be lodged to ASIC. Any kind of investment, including superannuation, contains some kind of risk. Fraud risk assessments can help detect any unlawful or suspicious activity in an organisation so the management can develop strategies against it.

In the case of superannuation, the rules that surround it are in place to protect consumers from losing their money and ensuring they have a comfortable retirement. Investment fraud schemes will always try to appeal to the need of individuals to access their money early so everyone needs to be aware of the laws and any updates.