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Increase in frauds and fake schemes targeting SMSFs

The ATO have recently released a warning to SMSFs (and this applies to any individual investor regardless of ownership structure) that they have seen a significant increase in the number of dodgy / fake investment schemes targeting investors. This may take the form of crooks impersonating financial advisers or SMSF experts, with promises of high returns if they invest in their fake schemes with their retirement savings.

It may also take the form of these crooks simply getting access to your super accounts if you have provided such information to allow them to do that. Protecting your identity and account details is important to ensure fraudsters cannot access your SMSF or other superannuation accounts.

The ATO have listed these tips below to help protecting your identity and your super:

  • make sure your details with us and your super fund are up to date
  • be cautious of what you share – don’t give out TFN, date of birth, bank or super details unless you trust the person you’re dealing with and they require these details
  • visit ASIC’s website to check if the person you are dealing with is a licenced professional
  • don’t ignore ATO issued SMS or email alerts:
    • if you are in a self-managed super fund (SMSF) and you receive an alert from the ATO about changes to your SMSF that you are unaware of, phone us immediately on the Superannuation Infoline 13 10 20. We can place protective measures on your ATO account if required.
    • if your super is managed by an APRA fund and you receive an alert from the ATO about changes made to your SMSF, but you have not authorised for an SMSF to be established, you should immediately contact us on the Superannuation Infoline 13 10 20 and also call your APRA fund and advise them of the suspect transaction. You can also request a secret password to be placed on your account with instructions your super is not to be released without that password.

The ATO also state that “if you suspect you have been a target of identity theft or a scam the best approach is for us to work together to have protective measures put in place in order to keep your tax and superannuation safe and secure.”

Admittedly, it can be very hard for inexperienced DIY investors to tell the difference. The old saying of “if it sound too good to be true, it probably is”, is a good place to start, particularly when it comes to promises of high returns. High returns with little risk is a clear sign that something is wrong. The other strategy is to stick to traditional assets where you retain and can verify ownership, such as equities or ETFs listed on an approved exchange (such as the ASX), or assets such as managed funds with a long history and have Lonsec ratings / research reports verifying not only their actual existence, but also a view on the managers capabilities. Whilst it is impossible to completely remove risk from the investment process, you can at least reduce the risk of fraud substantially by sticking to these simple guidelines.

 

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