• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

SuperGuide

Superannuation and retirement planning information

  • SuperGuide Premium
  • Account
  • Log In
  • SuperGuide Premium
  • Account
  • Log In
  • How super works
    • Super for beginners
    • Super rules
    • Employers guide to super
    • Super contributions
    • Super and tax
    • Accessing super
    • Super news
    • Women and super
    • Super tips and strategies
    • How-to guides
    • Super quizzes
    • Superannuation Q&As
    • Superannuation glossary
  • Super funds
    • Best performing super funds
    • Super fund rankings
    • Best performing pension funds
    • Pension fund rankings
    • Super fund average returns
    • Super investing strategies
    • Comparing super funds
    • Choosing a super fund
    • Choosing an investment option
    • Super fund fees
    • Insurance and super
    • Super fund profiles
  • SMSFs
    • SMSFs for beginners
    • SMSF administration
    • SMSF checklists
    • SMSF compliance
    • SMSF investing
    • SMSF pensions
    • SMSF strategies
    • SMSF Q&As
  • Plan your retirement
    • Retirement planning for beginners
    • When should I retire?
    • How long will I live?
    • How much super do I need?
    • Will I get the Age Pension?
    • How much will I spend in retirement?
    • Financial advice
    • Retiring overseas
    • Preparing for retirement
    • Retirement planning strategies
    • Retirement calculators and reckoners
  • In retirement
    • Income in retirement
    • Super lump sums
    • Super pensions
    • Age Pension
    • Working in retirement
    • Life in retirement
    • Senior concessions and services
    • Aged care
    • Estate planning
    • Super death benefits

Home / How super works / Super for beginners / Super scams: What are they and how do you avoid them?

Super scams: What are they and how do you avoid them?

October 1, 2019 by Penny Pryor Leave a Comment

Reading time: 4 minutes

On this page

  • The growing cost of scams
  • Traditional SMSF scams
  • Being encouraged to set up an SMSF to invest in cryptocurrency or property
  • Identity theft investment scams
  • How to avoid scams
  • What to do if you are scammed
  • How and if you can recover your funds

As technology advances, so too do the ways and means by which scammers can extract money from people.

Superannuation, self-managed superannuation funds (SMSFs) and individuals’ investment funds are increasingly being targeted by scammers due to the sheer size of the funds available, and advancements in technology which are enabling fraudsters to steal identities and subsequently superannuation and investment funds.

A recent online fraud syndicate – led by a 21-year-old woman – in which a group of people stole identities and then used those stolen identities to access share accounts and superannuation monies, is a powerful example of the evolution of scams in this space.

The growing cost of scams

In the eight months till the end of August 2019, Australians lost $44.4 million in investment scams, compared to $38.8 million for the whole of 2018, according to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch.

In the first eight months of this year there were 3,534 investment scam reports to Scamwatch. Of those reports, 43.1% resulted in financial losses. Interestingly, men lost more money than women – 74.1% compared to 24.8% – and were also more likely to be the victims of the reported scams – 64.7% compared to 32.3% (the remaining percentages were reported as Gender X).

Investment scams are also the leading scam for losing money, according to Scamwatch, compared to other scams such as dating and romance, false billing, online shopping and identity theft.

Are you with a top performing super fund?

Click here to compare more than 90 Australian super funds, including returns, fees, features, awards and more.

Traditional SMSF scams

SMSFs are frequently utilised by fraudulent operators and scammers when trying to access people’s superannuation funds. A scam may promise early access to superannuation and encourage people to roll their superannuation out of a larger Australian Prudential Regulation Authority (APRA) regulated fund into an SMSF.

They may have convinced the person that they will be able to access the funds once they have set up the SMSF. Acting as a financial adviser for the fund’s rollover the scammer steals a percentage, or all, of the funds.


Need to know: Be wary of anyone offering early access to superannuation. Outside of extreme financial hardship or compassionate grounds, you generally won’t be able to access your superannuation until you are between 55 and 60 years old.

Learn about all the ways you can access your super in SuperGuide article When can I access my super? All conditions of release explained.


Being encouraged to set up an SMSF to invest in cryptocurrency or property

Scam operators have also lobbied people to move their superannuation from large APRA regulated funds into SMSFs because SMSF trustees have more flexibility in what they can invest in.

Traditionally these types of operators targeted property investments, for example through seminars or newspaper advertisements, and encouraged people to set up an SMSF to buy a property and get into the property market.

However, people who did this often didn’t understand the complexity of SMSFs and property investing and would end up breaching the sole purpose test while the spruiker skimmed a commission off the top.

These days, the ‘get rich quick’ schemes promoted by fraudsters are frequently cryptocurrency trading scams. Last year Scamwatch reported that cryptocurrency trading scams were the second most common type of investment scam pushed on victims.

Compare super funds

Read more...

Advertisement

Need to know: These kinds of scammers will contact people directly and promise a ‘hot tip’ or insider knowledge. Avoid engaging with any kind of investment offer that contacts you out of the blue.


Identity theft investment scams

These scams involve extracting information – through phishing, social media cites, breaking into mailboxes etc. – and stealing an identity. The identity can then be used to access bank accounts, credit card details and online shopping websites.

Identify theft was used in the recent online scam which involved a 21-year-old woman. The woman is alleged to have been involved in a campaign that used stolen identities to access millions in superannuation monies from a number of large superannuation funds.

The Australian Securities and Investments Commission (ASIC) and the Australian Federal Police (AFP) allege identity information was purchased from dark net marketplaces, and the syndicate used that information, along with single use SIM cards and fake email accounts, to undertake ‘identity takeover’.

These ‘identities’ then opened bank accounts, into which the syndicate transferred superannuation money and money from investment accounts.

How to avoid scams

The adage ‘If something sounds too good to be true, it probably is’, is worth remembering when it comes to avoiding scams.

  • Don’t invest in anything from unsolicited contact – i.e. phone calls, emails or even door knocking – promising a hot investment. Scammers will often call repeatedly and are known to target the vulnerable and elderly, but you should just hang up or shut the door.
  • Don’t invest in anything at an investment seminar. Always do your own due diligence and research into any kind of offer. Look up share values on the Australian Stock Exchange (ASX) and seek independent financial advice if needed (see our list of independent i.e. non-conflicted financial advisers here Find an Australian independent financial adviser)
  • To avoid identity theft, and the investment scams that stem from it, don’t share your passwords, don’t give away too much information on social media and don’t open emails (or especially links in emails) from unknown or unverified sources. Lock your letterbox, shred important documents and make sure your computer is secure.
  • You can also check whether somebody calling themselves a financial adviser is registered as having an Australian Financial Services License on ASIC’s website. They also have a list of companies you should not deal with.

What to do if you are scammed

  • If you think you might have been caught up in a scam, contact your financial institution immediately to freeze your accounts and credit cards.
  • Report it to the police if money has been stolen.
  • ASIC also suggests getting a copy of your credit report to check who might be running up debts in your name.
  • You can also report the scam at Scamwatch here and at the Australian Cyber Security Centre here.

How and if you can recover your funds

It may be difficult to recover funds lost in a scam. There are some organisations that may be able to help you retrieve funds if they have been stolen as a result of identity theft such as iDcare and you can also apply for a Commonwealth Victim’s Certificate.

Advertisement

A Victim’s Certificate might help you negotiate with your financial institution or superannuation fund to remove a fraudulent transaction.

Financial institutions and superannuation funds also have their own systems in place to protect against fraud and will often contact customers if they notice irregular transactions and may reimburse them.

Are you with a top performing super fund?

Click here to compare more than 90 Australian super funds, including returns, fees, features, awards and more.

Learn more about super housekeeping strategies in the following SuperGuide articles:

Life insurance through super: A definitive guide

January 18, 2021

Super tips and strategies if you are in your 20s

October 6, 2020

Super tips and strategies if you are in your 30s or 40s

October 6, 2020

Super tips and strategies if you are in your 50s

October 6, 2020

Super tips and strategies if you are in your 60s or 70s

October 6, 2020

The easy way to find and consolidate your lost super

October 1, 2020

What to do if your employer doesn’t pay your super

September 18, 2020

10 points to check on your annual super fund statement

September 2, 2020

10 EOFY housekeeping tips for your super

May 1, 2020

10 key super fund fees: What are they and why am I paying them?

November 20, 2019

Related topics

How super works Super for beginners

Related features

Super tips and strategies

IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

© Copyright SuperGuide 2009-21. Copyright for this article belongs to SuperGuide Pty Ltd, and cannot be reproduced without express and specific consent. Learn more

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

How super works
Super for beginners
Super rules
Employers guide to super
Super contributions
Super and tax
Accessing super
Super news
Women and super
Super tips and strategies
How-to guides
Super quizzes
Superannuation Q&As
Superannuation glossary
Super funds
Best performing super funds
Super fund rankings
Best performing pension funds
Pension fund rankings
Super fund average returns
Super investing strategies
Comparing super funds
Choosing a super fund
Choosing an investment option
Super fund fees
Insurance and super
Super fund profiles
SMSFs
SMSFs for beginners
SMSF administration
SMSF checklists
SMSF compliance
SMSF investing
SMSF pensions
SMSF strategies
SMSF Q&As
Plan your retirement
Retirement planning for beginners
When should I retire?
How long will I live?
How much super do I need?
Will I get the Age Pension?
How much will I spend in retirement?
Financial advice
Retiring overseas
Preparing for retirement
Retirement planning strategies
Retirement calculators and reckoners
In retirement
Income in retirement
Super lump sums
Super pensions
Age Pension
Working in retirement
Life in retirement
Senior concessions and services
Aged care
Estate planning
Super death benefits
Advertisement
Compare super funds

Join SuperGuide Premium and give your retirement plans a boost.

Get access to independent expert commentary on the latest super, retirement and SMSF issues, including the top performing super and pension funds, how much super is enough, the latest super rates and thresholds and new super measures and strategies.

You’ll have access to more than 600 articles, how-to super guides, checklists, tips, calculators, reckoners and other tools, as well as a monthly newsletter.

Find out more

Footer

Important: Disclaimer

All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

Learn more

About SuperGuide

SuperGuide is Australia’s leading superannuation and retirement planning website. Learn more

Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629

  • Contact us
  • Advertise on SuperGuide
  • Careers

Before using this website

  • New to SuperGuide?
  • Terms and Conditions of Use
  • Financial Services Guide
  • Privacy Policy and Privacy Collection
  • Copyright Policy
  • Editorial Policy and Complaints
  • Disclaimer

  • SuperGuide Premium
  • Subscriber feedback
  • Sitemap