Your super and investment savings represent years of hard work for a secure future. Unfortunately, they can be a prime target for scammers, causing significant financial loss and emotional distress.
Financial scams are on the rise and becoming more sophisticated, making them harder to detect. This article will help you recognise common types of super and investment scams, how to identify them and how to protect yourself and your loved ones.
Super scams
These scams usually involve individuals or companies pretending to be from a super fund or regulatory body seeking your personal information. They may claim they need it to update your super account or verify your identity. Or they could offer to help you access your super before you’re eligible to under law. They may claim that doing this can, for example, help you pay off debts or purchase a house. But accessing your super early can result in significant penalties. In addition, these scams may involve high fees or charges which can eat into your super savings.
We recommend that:
- You never give out your personal information unless you’re sure it’s safe.
- You’re aware of the conditions of release to withdraw your super.
Given the variety of scams out there, following these four steps can help prevent you falling victim.
Stop
If you receive a suspicious call, email or text, pause and assess. Genuine organisations never pressure you to act immediately or ask for your password via email.
Reflect
Be careful about sharing personal information online. Scammers piece together details from various sources to exploit or create accounts in your name. Always reflect.
Protect
Whether it’s personal or work, staying vigilant is crucial. When in doubt, reject contact, delete suspicious messages and avoid opening unknown links.
Report
If you receive a suspicious email, do not click on any links or attachments or provide any information. If you receive a suspicious email, you can report it to the Australian Cyber Security Centre (ACSC).
Amy’s story: a crypto cautionary tale
Amy, intrigued by a cryptocurrency investment promising high returns using her super, fell victim to a scam that led to the loss of her savings and her involvement in criminal activity.
Her story highlights the dangers of crypto scams. It will help you to recognise and avoid such fraudulent schemes and the potential consequences, including financial loss and legal repercussions that victims may face.
Amy was contacted by a man named Michael via Facebook. He was promoting a cryptocurrency investment business promising amazing returns that didn’t require an initial deposit from her bank account but rather from her superannuation.
A complex scheme
Intrigued by this, Amy engaged in further conversation with Michael. He walked her through the steps of setting up a legitimate Self Managed Super Fund (SMSF), allowing Amy to take the funds she had invested with her existing super fund and place them into a bank account, which was then invested into a fake crypto wallet/fake investment website.
As time went on, Amy would check her balance on what she believed was a genuine trading platform – it showed significant growth, her initial $30,000 deposit soaring to over $170,000. However, after hearing about instability in the crypto markets, Amy decided that it might be time to withdraw some of her profits. Amy contacted the crypto business, which advised that she would need to pay an upfront sum of $4,500 to cover taxes – funds that Amy didn’t have readily available.
Amy reached out to Michael and explained that she wanted to withdraw some of her money from her crypto investment but couldn’t afford to pay the upfront lump sum tax. Michael explained if Amy agreed to open a number of bank accounts and handle some fund transfers on his behalf that would “help to grow the Australian business”, she would be able to earn a 5% commission on each amount transferred and accumulate enough money to pay the lump sum tax.
Amy agreed to the arrangement and funds began being transferred into the bank accounts Amy had opened. Michael would call Amy and request her to “transfer $x into the crypto wallet, then purchase this specific crypto coin”. The crypto wallet would then be emptied by Michael/Crypto Investments.
How did the scam work?
Amy unknowingly fell for a crypto investment scam. Michael convinced her to open an SMSF, allowing her to access funds that were meant to be preserved until retirement. The fake crypto platform showed huge growth, giving Amy confidence in the investment and making her feel good about the nest egg she believed was growing. By quoting her high upfront costs to access the funds, Michael manipulated her into becoming an unwitting money mule, engaging in money laundering and helping the scammers deceive other unsuspecting people out of their funds.
Unfortunately, Amy has not only lost her super but has also become involved in criminal activity. The matter is now with the police and Amy faces possible prosecution for money laundering offences.
If you’d like personal guidance on this topic, contact our team to discuss your situation.
