How scammers target your superannuation (and what you can do to protect it)
Written and accurate as at: Sep 13, 2024 Current Stats & Facts
Your super is likely one of your biggest financial assets, and unfortunately that makes it a popular target for scammers. While they have plenty of resources available to them these days, sometimes all it takes to dupe someone is a simple message and a promise of financial gain.
Below, we outline a few ways scammers might attempt to get their hands on your super, plus what you might be able to do to keep your retirement savings safe.
Early access schemes
There are strict rules around when super can be accessed, but that hasn’t stopped scammers from contacting people out of the blue and convincing them to have their super released before they’re legally entitled to.
These scammers might then charge exorbitant fees for their ‘service’ or — if they’re especially brazen — use the information gathered to steal someone’s identity and try to make off with all their funds.
What’s so sinister about early access scams is that they tend to exploit people’s anxieties about rising costs of living. Scammers might claim that you’ll be able to withdraw the money to use for personal reasons, such as paying off debts or even purchasing a home.
But the rules are quite clear. Except in very narrow circumstances — such as severe financial hardship, diagnosis of a terminal illness, or participation in the First Home Super Saver Scheme — you’re only allowed to access your super once you meet a condition of release, and that generally means reaching preservation age and retiring.
What’s more, the ATO coordinates the early release of super through myGov. So even if you are eligible to access your super early, say on compassionate grounds, you shouldn’t have to deal with any third parties or pay a fee to get it.1
Self-Managed Super Fund scams
Another common scam involves posing as a financial adviser or superannuation expert and convincing fund members to transfer their retirement savings into a phoney Self-Managed Super Fund (SMSF).
Scammers will try to sell you on the idea in a few ways. They might claim you’ll have greater control of your money or be able to reap higher returns. Some might even go so far as to set up a fake website or investment app to give the appearance of legitimacy.
Oftentimes, scammers will know better than to pressure you right off the bat. Instead, they’ll opt for a patient, friendly approach in the hopes that they’ll be able to build trust over time.
If their ruse is successful, they’ll likely transfer your money into an SMSF or bank account they control and disappear. And even if you stop short of handing over your money, the scammers might have extracted enough personal information from you to make transfers in your name.
What to do to help keep your super safe
According to ScamWatch, there were 301,765 scams reported in 2023, with total losses exceeding $476 million.2 Text messages were the most popular way scammers initiated contact, meaning a lot of financial pain could have been avoided if Australians were a bit more sceptical of the unsolicited messages they received.
Along with general vigilance and awareness of the types of tactics scammers use, here are some of the things you can do to help keep your super safe:
- Be suspicious of anyone who contacts you promising any kind of financial gain or offering to help release your super early
- If you receive any suspicious looking texts or emails, don’t click on any links
- If you’re wondering whether a text or email from your fund is legitimate, contact them directly. Make sure to source the website or number yourself and don’t rely on those provided in the text or email
- Use multi-factor authentication on your account (if your super fund offers it)
- Check your super balance and account details regularly to make sure nothing is amiss
If you believe you’ve given personal information to a scammer, contact your super fund (and financial institution) immediately. You can also log into your myGov account to make sure no applications for early super release have been made on your behalf.
Sources
1 ScamWatch
2 ScamWatch