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Watch out for superannuation scammers

July 20th, 2017

An offer to help you get your superannuation money early might seem like a great idea. But if you agree to it you could end up in a lot of trouble, according to the Australian Securities and Investments Commission (ASIC).

Superannuation scams tend to fall into two types. The first is where the scammer says they can withdraw your super or move it to a self-managed super fund so that you can use it to pay off debts or use it for something you really want. But once your super has been withdrawn or transferred, the scammer then takes a large commission or even steals the entire amount.

As well as risking your hard-earned retirement savings, ASIC warns that you may also become caught up in tax penalties from accessing your super early. Accessing your super before age 55 (at the earliest) is illegal except in very limited circumstances, for example when you are experiencing severe financial hardship or on compassionate grounds. Find out more about the age you need to be before you can get hold of your super money here.

The second approach is where the scammer steals your identity. They can then transfer your super to a fake self-managed super fund that they can access.

Read more about how to protect yourself from identity fraud here.

According to ASIC, scammers tend to target vulnerable people such as those struggling with debt, those with non-English speaking backgrounds or the unemployed. Promoters of illegal super schemes will try to get you to believe that anyone can access their super with their help.

ASIC lists the following warning signs to alert you to a super scam: advertisements promoting early access to super; offers to ‘take control’ of your super; or offers of quick and easy ways to access or ‘unlock’ super.

If you have been approached about accessing your super early you should report it to ASIC via the online complaint form or by calling ASIC’s Info line on 1300 300 630.

You can also report it to the Australian Taxation Office by calling 13 10 20 or call First Super on 1300 360 988.

More information about super scams is available on ASIC’s MoneySmart website, which helps you to find out how super scams operate so you can protect your retirement savings. You can also read a super scam case study on the site.

Sources: https://www.moneysmart.gov.au/scams/superannuation-scams