Super scams: What are they and how to avoid them?

Superannuation is designed to help Australians save money for retirement, by building up a balance via deposits over a person’s working life. Australians have around $3.9 trillion dollars tucked away in super funds, according to The Association of Superannuation Funds of Australia (ASFA). With such a large amount of money in the super scheme, it may come as no surprise that there are fraudsters and scammers looking to exploit it through various superannuation scams.

Australians made over 601,000 scam reports to organisations like Scamwatch, ReportCyber, the Australian Financial Crimes Exchange (AFCX), IDCARE and the Australian Securities & Investments Commission (ASIC) last year. This was an 18.5% increase on the previous year’s reports. Fortunately, the Australian Competition & Consumer Commission’s Targeting Scams report shows a 13.1% decline in total reported losses due to scams. However, these losses still amount to around $2.74 billion dollars. That’s why it’s important to know how to identify potential signs of a superannuation scam, before you mistakenly give away your money.

What are some common ways people are scammed?

Direct contact

1. Typically, scammers make contact with a person in a variety of ways – by a phone call, text, email, on social media, in person or via a letter sent in the post, for example – and pretend to be a representative from an official government department, legitimate business or similar. They may have some of that person’s information to start with, and can sound very convincing.
2. The scammer will ask the person to answer some questions or fill out a form, thereby capturing sensitive information, such as passwords, dates of birth, full legal names and other relevant account information.
3. The scammer uses that information to gain access to the victim’s super account to transfer the funds, divert payments to another account, or make other changes.
4. The victim is typically not aware of the theft until they check their super balance online or receive a statement.

Accessing your device

1. Generally, a scammer sends a person an email or text, which appears to be from a legitimate source.
2. The person is asked to click on a link, perhaps to verify their information or threatened to do so.
3. When the link is clicked, it downloads malware (malicious software) to the victim’s computer or mobile device.
4. The software allows the scammer to gain access to that computer, phone or other device or network.
5. The scammer will then collect personal information off this device.
6. The scammer uses that information to gain access to the victim’s super account to transfer the funds, divert payments to another account, or make other changes.
7. The victim is typically not aware of the theft until they check their super balance online or receive a statement. The malware allows the scammer to collect lots of data, potentially allowing access to bank accounts or to steal that person’s identity (and set up loans, credit cards, etc, in the victim’s name).

The ACCC’s former deputy chair, Delia Rickard, suggests that you should “never follow a hyperlink to reach the myGov website or the website of your own super fund. Instead, you should always type the full name of the website into the browser yourself.”

How can I protect myself from superannuation scams?

There are several actions you can take to reduce the risk of falling victim to a superannuation scam:

• Check your super balance regularly, via a secure online portal (with a https:// at the start), or by calling your super provider directly on a phone number from a reputable source.

• Ensure that all your personal and contact details are up to date, through your online super account or by calling your fund.

• Secure your letterbox – mail theft is a common way in which scammers gain access to people’s personal details.

• Be careful about how you dispose of old documents that could contain sensitive personal information.

• Be careful about what information you divulge on social media, and online (such as when subscribing to a newsletter, entering a competition or filling out any online forms). The government’s eSafety Commissioner has information which may help.

• Don’t give any personal information to someone you don’t know or trust – if someone claims to be from your super fund or bank, check directly with the relevant institution to verify their identity.

• Regularly check your bank and superannuation statements for suspicious or fraudulent activity.

• Make sure to log out of your online banking and super services across all your devices and apps after using them.

• Make sure your online accounts are protected by setting strong passwords, which are not easy to guess. Do not share your passwords with anyone.

• Stay up to date with the latest scam prevention advice from credible and reputable sources, such as government regulators. Cyber crime can evolve and change rapidly, especially with the rise of artificial intelligence.

If contacted by phone:

• Be wary of callers who claim to be from a government authority asking about your super.

• Do not give any information about your superannuation to someone who has contacted you. Do not even confirm that you have a super account with a particular organisation.

• Hang up and call the organisation directly by doing an independent search for their contact details.

• Ask for more time. Don’t let anyone pressure you to make a decision immediately, take your time and consider who you might be dealing with.

If contacted via email, text, social media or letter:

• Be suspicious and review all written correspondence carefully for tell-tale signs such as spelling or grammar mistakes, or email addresses that don’t match logically or with previous correspondence.

• Review social media connection requests carefully, and avoid clicking on links provided in messaging services.

• Never click on a hyperlink to reach a site where you think you would need to enter your personal details, such as a government website or financial institution.

• Type in the full URL (e.g https://my.gov.au) yourself if you know the correct address.

• If you do not know the correct address, do independent research and look for secure sites (https: in the url).

• Find the organisation’s phone number from an independent, reputable source and call them to verify (if it’s an organisation that’s known to you).

• Verify their details on ASIC’s website, by verifying their Australian Financial Services Licence, and make sure they have not been disqualified from giving financial advice.

• Ensure operating systems across your devices are up to date, and use antivirus software where possible.

• Compare the email or return-to-sender address to other correspondence you have received, and be on the lookout for similar addresses designed to look legitimate. If in doubt, throw it out.

It may be tempting to respond to texts or emails from scammers to give them a piece of your mind, but Ms Rickard suggests that the scammer could “escalate their attempts to get your money” in response.

Related: Pyramid schemes explained: How to spot a scam

What can I do if I think I’ve been scammed?

If you think you have been targeted by a superannuation scam or you have had money stolen by a scammer, taking immediate action could help prevent the scam or limit its impact, say the ACCC and ASIC. Here are some actions to consider:

1. Contact your super fund as soon as possible and ask them to take a look at your account for signs of fraudulent activity.
2. Call your other financial institutions to alert them that you have possibly been the target of a scam. Talk to them about the options you could take, such as freezing bank accounts linked to any potentially compromised super accounts.
3. Stay vigilant against follow-up scams, such as someone calling you and offering to recover your losses for a fee.
4. Lodge a complaint with ASIC.
5. Report the scam, including phishing and fake-billing scams, to the ACCC’s Scamwatch.
6. Get support if you need it. Falling victim to a scam can have a serious impact on your mental health and relationships, and both Lifeline and Beyond Blue may be able to help you. You can call Beyond Blue’s 24/7 support line on 1300 22 4636, and Lifeline can be contacted via phone 24/7 on 13 11 14. You can also contact IDCARE, a free national identity and cyber support service that will work with you to develop a specific response plan to your situation and support you through the process, on 1800 595 160 or online.

5 ways you could lose your money through a superannuation scam

There are many ways you might lose your super – or part of it – through a superannuation scam. In addition to early release of funds scams, other common types of super scams include identity theft, investment fraud, ‘dating’ scams, and extortion threats, according to Australian authorities.

1. Early release of funds

The Australian Government sometimes allows people suffering financial hardship due to economic impacts to withdraw a portion of their funds held in their superannuation account. This was seen during the COVID-19 pandemic, but that specific scheme closed on the 31st of December 2020.

Soon after the launch of that scheme, Scamwatch identified a range of common COVID-19 super withdrawal scams, with fraudsters using a range of excuses, including:

• Offering to help people access the money in their super.

• Checking whether a person’s super was eligible for deals or benefits.

• Ensuring that the person wasn’t locked out of their super accounts due to the new rules.

• Posing as the myGov service or another department and asking a person to verify their details.

• Posing as the Australian Tax Office (ATO), myGov, Services Australia or another department and making threats to scare people into taking action and revealing personal information.

Scammers could then use this information to claim or divert early payments to another account.

There are also reports of scammers offering to help people access their super early for property investment, or to invest in high interest earning self-managed super funds (SMSFs). These quick and easy ways to access your super funds early often would not satisfy a condition of release or meet the super fund holder’s required preservation age. Generally, when the funds leave the person’s superannuation account, they are being transferred to the scammer.

The scammers may also offer to help you fill out genuine documents that are needed to complete this process. This could include giving them your personal details. The scammer may tell you that after the paperwork is lodged, you can access your super funds for personal use, sometimes for a fee. Accessing super fund payments in this way would be illegal and you would end up paying additional tax, as well as suffer other penalties.

Related: Superannuation rules for over 65s

2. Identity theft

Many superannuation funds these days make use of either security questions or two-step verification (e.g. sending a text to your phone or emailing you with a code) to make their online log-in process more secure. In some cases, fraudsters may be able to use your personal details to overcome these measures and access your super.

Additionally, some super funds may still send their members physical correspondence containing details like their member number or other pieces of personal information which could be useful to identity thieves. The Australian Government’s Moneysmart website says it’s wise to “put a lock on your street mailbox so that people can’t steal your mail.”

A common scenario reported to the ACCC:

1. In a phishing scam, victims will receive an email or text message claiming to be from a government department, such as Services Australia, requesting personal details to confirm their eligibility for a government payment.
2. The emails and texts will include a link and request personal details such as a tax file number (TFN), superannuation details or copies of identity documents.
3. The scammers then use this information to overcome security measures – such as passwords and two-step verification processes – to access your super account and steal funds.

3. Threats to extort funds

Some scammers use threats and other scare tactics to convince people to hand over money from their super funds.

The ACCC describes one frequently reported scam scenario:

1. In a fake government threat scam, victims receive a robocall (a pre-recorded message) pretending to be from a government department, such as the ATO, Department of Home Affairs or Australian Federal Police (or others).
2. The scammer will claim that something illegal, such as tax fraud or money laundering, has been committed in the victim’s name and they should dial 1 to speak to an operator.
3. The scammer then tries to scare people into handing over money and may threaten that they would be arrested if they refuse.

“Don’t be pressured by a threatening caller and take your time to consider who you might be dealing with,” Ms Rickard said.

“Government departments will never threaten you with immediate arrest or ask for payment by unusual methods such as gift cards, iTunes vouchers or bank transfers.”

4. Investment fraud

Another kind of superannuation scam cited by ASIC is investment fraud. This often involves individuals with SMSFs being convinced by scammers to invest in non-existent or illegal companies or sectors.

ASIC specifically points to the example of Trio Capital, which carried out what the Parliamentary Joint Committee on Corporations and Financial Services described as “the largest superannuation fraud in Australian history”, conning Australians out of around $176 million all up. The number of individuals affected was over 6,000, including nearly 700 who had invested either directly or through a SMSF.

While the government provided nearly $55 million to 5,400 individuals who had invested through Australian Prudential Regulation Authority (APRA) regulated super funds, no such compensation was provided to individuals who had invested either directly or through SMSFs.

Scammers may also encourage you to open a self-managed super fund to help you control your super. They may also offer:

• To help grow your super by investing in unusual investment types, such as foreign currency bonds and cryptocurrencies.

• To manage your SMSF for free or for a small fee.

• To invest your super funds with them in fake high return investments.

• To provide reports on your super’s performance through a fake app or computer program.

Scammers who do this may not be pushy and instead try to build trust with you over time. Once they’re given access to your super, via a SMSF or bank account they control, they can withdraw the funds.

5. ‘Dating’ scams

The ACCC also notes that it’s not uncommon for scammers to first gain the trust of their victims by developing a romantic or other type of relationship with them. Having built up a level of trust, the scammer convinces individuals to either send them small amounts from their super, or even move the entirety of their super balance into the scammer’s SMSF.

Where can I find advice about protecting myself from scams?

Further information and advice is available from the Australian Government and wider authorities if you are seeking to protect yourself, or others who may be vulnerable, from financial scams, including

• Australian Securities & Investments Commission (ASIC)

• Services Australia

• IDCARE

• Office of the Australian Information Commissioner (OAIC)

• Scamwatch

• Moneysmart

• eSafety Commissioner

• Australian Tax Office (ATO)

• Australian Financial Complaints Authority (AFCA)

• Australian Banking Association

• Australian Financial Security Authority (AFSA)

• Australian Cyber Security Centre

Your superannuation fund may also have information relating to their scam reporting process available. Canstar has also been a target for scams and our security team has provided a Scams and Fraud Warning statement to keep our readers informed.

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Cover image source: fizkes/Shutterstock.com.au