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Super scams you should watch out for

Beware the con artists angling for your nest egg.

Lisa Papachristoforos

Superannuation services manager, Hughes O’Dea Corredig

(iStock.com/Tero Vesalainen)

Editor’s note: The following article contains information only. It is not intended as general or personal advice. Your Money recommends seeking professional advice specific to your personal circumstances.

The superannuation industry, worth $2.8 trillion as at 30 September 2018, is a homing device for scammers domestically and internationally.

Below are two of the latest scams hitting the superannuation industry and super fund members you should beware of.

ATO Impersonators

There aren’t many people who don’t shudder at the thought of the Australian Taxation Office (ATO) contacting them.

And this is exactly what scammers have now tapped into.

Scammers use the front of the ATO as a threat and penalty scam, targeting not only an individual’s taxation debts, but also superannuation accounts and contributions, including members of self-managed super funds (SMSFs).

Calls are made by scammers to unsuspecting victims to either their mobile or landlines.

The conversations are becoming ever more sophisticated in an attempt to appear valid, with scammers spoofing or cloning the ATO switchboard number to gain credibility with victims, and leaving phone messages stating reference numbers and extension phone numbers. It has been reported to the ATO that the most frequently used spoof landline number appearing as the caller ID is 6216 1111.

The ATO isn’t standing idly by. Their fight against impersonators and scams continues unabated, as the value of losses hit $830,000 in November 2018 alone.

If you are concerned regarding contact from someone claiming to be from the ATO, please call the ATO on 1800 008 540 to confirm its legitimacy.

Note that a legitimate call from the ATO will never threaten to arrest you or demand payment via bitcoin or credit card.

For the latest information regarding ATO scams, refer to www.ato.gov.au/general/online-services/identity-security/scam-alerts.

Property Spruikers

Australian property prices are at all-time highs, and scammers understand how eager the public is to be in the property market.

In June 2018, the Australian Securities and Investment Commission (ASIC) acknowledged that people had moved to SMSFs as a way to get into the property market, and were using a self-managed fund solely for this purpose.

A lot of this movement is due to property spruikers.

So what does property spruiking look like?

It starts as an invitation to a ‘wealth creation’ seminar or some kind of event with the promise of tips and opportunities.

At the seminar there is a particular property investment scheme, system or development promoted.

A financial planner is usually present to answer any questions that attendees have.

Suggestions of using equity in their home to borrow for the scheme, system or development are usually raised.

Unbeknownst to attendees, high pressure sales techniques are used including discount offers and bogus claims of government approval and large capital growth, to entice them to sign up at the seminar.

These attendees, that already have a predisposition towards property investment, are often swept up in the moment, and often make financial decisions that could be to their financial detriment.

ASIC has identified the growing use of ‘one-stop-shops’ where the spruiker has commercial relationships with a property developer, real estate agent, tax agent or lawyer, whose products and services the attendees are encouraged to utilise.

This places people at increased risk of getting poor advice that does not take account of their personal circumstances or is not provided with their best interests in mind.

The ATO has commenced targeting the use of ‘one-stop shops’ given the “inherent conflicts of interest that has the potential to cause major financial detriment to an individual’s financial future” .

If you are concerned that you or someone you know has entered into an arrangement that might not be in their interests, please seek professional advice from a licensed financial adviser, as listed on the ASIC MoneySmart website at www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register.

The Australian Competition and Consumer Commission (ACCC) acknowledges that the above mentioned scams are amongst the top 10 scams.

The ACCC, along with ASIC and the ATO, are fighting to protect everyday Australians from scammers targeting superannuation, but regulators can’t do all the work.

Public discussion and education about the latest scams assists in protecting the community against financial mistakes and fraudulent activity.

Share this article to help spread the word about superannuation scams.

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