Surge in super scams

Frauds treble during COVID

THE number of superannuation scams has spiked by more than 300 per cent during the COVID- 19 pandemic, according to the consumer watchdog.

The Australian Competition and Consumer Commission said its Scamwatch division saw reports of scams related to super lift from 275 in 2019 to 1181 by October 29 2020, an increase of 323 per cent.

One common incident involved the government’s COVID- 19 early release of super scheme, which has seen more than 4.7 million fund members withdraw in excess of $ 36.9bn from their retirement savings since April.

The ACCC said it had received numerous reports of people receiving legitimate text messages from super funds saying their withdrawal request had been approved or actioned without them having done so. In some cases, the person receiving the text message was not even a member of the fund in question.

“The recipient of the text was not necessarily the person who owned the super funds which the scammer was trying to access, as a part of the fraud in some cases included the changing of the victim’s mobile phone notification number,” the ACCC said.

Industry Super deputy chief executive Matt Linden said the sector had moved quickly to prevent bad actors from fraudulently accessing superannuation. “Working with the

Australian Taxation Office and other regulators, Industry Super funds were able to flag and stop a number of suspected fraudulent early release of super applications,” he said.

The ACCC said the ATO and Australian Federal Police were investigating instances of fraud in connection to early release of super.

However, a number of other common scams were not related to that scheme.

One involved a victim receiving promises of fake Woolworths and Coles vouchers of up to $ 300, ostensibly to “support people during COVID”, if they provided personal details, including their superannuation details.

Victims also reported receiving cold calls from individuals, sometimes implying they were government employee, who requested details to prevent the member being “locked out from their super under the new rules”.

Mr Linden urged fund members never to provide super details over the phone.

More traditional scams were also prevalent, such as “romance scams” where a person posing as a prospective romantic partner convinces an individual to transfer superannuation to them, sometimes via a self- managed super fund.

But despite the number of super scam reports more than trebling, the ACCC said reported losses fell 67 per cent, from $ 6.3m in 2019 to $ 2.059m in 2020 – although “$ 2.8m of the 2019 losses were from a single romance scam”.