Protect Your Superannuation from Scams

The Institute of Chartered Accountants have revealed that between 2007 and 2012, approximately 2600 Australians were scammed out of over $113 million in superannuation.

How?

It is important to note that these scams have affected Australians from all walks of life, including those who consider themselves to be financially savvy. The extent to which these scam artists are going, to develop complex and sophisticated schemes that appear at face value to be reputable, is almost inconceivable.

Think it won’t happen to you?

These schemes often have fake websites and manufactured prospectuses. It has also been noted that they have manipulated search engines so that any negative comments and warnings about a scam doesn’t appear at the top of any search engine.

Similar to many tax office scams, they offer links to websites claiming to be related to the regulatory body ASIC, (Australian Securities and Investments Commission) but these links take you to a fake website.

Some investors, in trying to recover their losses, were targeted by other scam artists who promised them they could recover some if not all of their lost funds, for a fee of course. Needless to say, they never saw their money again.

Typical Scams

Some of the more common scams that have been brought to the attention of regulatory bodies include:

• Scams encouraging people to roll their super into a self-managed fund whilst the con artists take a cut of the superannuation and charge a hefty fee to set up the fund of up to $10,000. The actual cost to set up a fund is around $1,500.
• Schemes that encourage people to set up Self-managed superannuation funds and encourage people to buy investment properties in the fund at an inflated price that is beyond what they and the fund can afford. 

Who is at risk?

According to the Institute of Chartered Accounting there are an increasing number of scams targeting Australians who are:

• aged between 35 and 50
• Self-funded retirees
• Small business owners
• People who have previously been affected by scams
• Socially isolated
• From a non-English speaking background
• From a low socio economic group

Who can you trust

It is important that you consult a financial adviser and your accountant before making any investment decision.

These scams are often complex and operated from outside Australia which makes it even more difficult to track them down and monitor.

Your accountant/ adviser is trained to investigate and analyse the performance and prospective returns of investments and consider them in the context of your current financial situation and your future financial goals.

Before making any investment decision, you should first consider with the assistance of an adviser/accountant, whether the investment is appropriate for your situation.