The Business

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Scammers targeting Australian super

Updated July 10, 2012 00:10:15

The superannuation industry has been warned to be on the look out for sophisticated scammers who are targeting Australian funds.

Source: The Business | Duration: 3min 23sec

Topics: fraud-and-corporate-crime, internet-culture, crime, superannuation, australia


ANDREW ROBERTSON, PRESENTER: The local superannuation industry has been warned: be on alert for sophisticated fraudsters looking to steal retirement savings. Regulators say they're stepping up efforts to track down international criminal cartels who are targeting Australian investors, including retirees who manage their own super funds.

Sue Lannin reports.

SUE LANNIN, REPORTER: Fake stocks and fake investment companies are not just in the movies. A report by Australian regulators has found real fraudsters have fleeced more than $113 million from local investors since 2007.

'MICHAEL', SCAMMED INVESTOR: I got a cold call. I had certainly researched where I was spending my money and what I was taking on my money quite heavily, I thought, for this company.

SUE LANNIN: It was an investment scam and 'Michael' lost $250,000. The report found at least 2,600 local investors have fallen victim to fraudsters over the past five years, as criminals cold call people offering too-good-to-be-true investments.

JOHN LAWLER, AUST. CRIME COMMISSION: Those figures mean that there will be on average 10 victims this week.

SUE LANNIN: Last year authorities set up a taskforce to track organised investment fraud. Now, every Australian household will be sent a letter warning them about the scams.

GREG MEDCRAFT, AUST. SECURITIES & INVESTMENTS COMMISSION: Criminals are a business and they are innovative and the way in which they construct their businesses are there to actually trick you into making investments in what are basically completely false investment schemes.

SUE LANNIN: The crime gangs are usually based offshore, including in Eastern Europe, Hong Kong and other parts of Asia, making them extremely difficult to track down and prosecute.

Earlier this year authorities swooped on a fraudster gang based on Gold Coast.

The Australian Crime Commission says the fraud is carried out by organised crime cartels who may be involved in other serious offences as well such as money laundering and drug trafficking. It says some people may not even know they are victims. They may find out their investment fund is fake when they retire and seek access to their superannuation.

The fraudsters often get people's names from legitimate mailing lists and the criminals are also targeting retirees with self-managed super funds.

GREG MEDCRAFT: Especially the growth in self-managed super, growing as it is from currently 25 per cent potentially to 30 per cent in the next 10 years.

SUE LANNIN: The report found most victims are male, middle aged or elderly and educated. They lost an average of around $17,000 each.

DOUG CLARK, STOCKBROKERS ASSOCIATION: A lot of it goes unreported just through embarrassment, but people get taken in. And what's really tragic is when they get other people in.

SUE LANNIN: The self-managed super fund industry is also educating financial advisors.

GRAEME COLLEY, SMSF PROFESSIONALS' ASSOC.: We've been talking to the Crime Commission about information that we can provide to our members so that they can put that through to their mums and dads who are investors in self-managed superannuation funds.

SUE LANNIN: So the best advice from the regulators is: have a healthy dose of scepticism, and if you get an unsolicited phone call offering a great investment, hang up.