Beware of Rogue Superannuation Schemes: ASIC’s Warning for Australians
Australians are being advised to exercise caution regarding potentially fraudulent superannuation schemes, especially following reports that many individuals have lost upwards of $1 billion in their retirement savings. Sarah Court, ASIC’s deputy chair, has flagged a series of warning signs that could indicate a scam and has urged citizens to be particularly vigilant as the new financial year often prompts searches for superannuation fund performance.
The beginning of the financial year typically spurs many to assess the performance of their super funds, simultaneously creating an opportunity for unscrupulous operators to exert pressure on individuals to switch their super into new, potentially risky funds. High-pressure sales tactics, misleading online ads, and promises of improbable returns are all red flags that Australians should watch out for when considering a change to their superannuation arrangements.
Court highlighted that individuals might be approached with sales calls that sound legitimate, as callers often appear to have the consumer’s best interests in mind. They may offer to assist in finding better products or even help locate lost super at no cost. However, the urgency and pressure to make quick decisions should raise alarm bells, as legitimate offers typically allow for more time and consideration.
The tactics employed by these callers can sometimes mask the complexity of the underlying schemes, making it difficult for even savvy investors to identify potential issues. Once an individual begins the transition to a new super fund, pulling out can prove to be challenging.
To help consumers navigate these tricky waters, ASIC has provided a list of warning indicators to help identify potentially harmful offers:
- High-pressure Sales Tactics: Any push for Immediate action should raise suspicion.
- Cold Calls: Unsolicited calls are often a red flag.
- Free Super ‘Health Checks’ and Prizes: Especially those advertised on social media.
- Offers to Find and Consolidate ‘Lost Super’ for Free: These can be deceptive.
- Involvement of Unlicensed Advisors: Seeking advice from unlicensed individuals should always be avoided.
- Limited Contact with Financial Advisors: If it’s difficult to interact with a financial advisor, be wary.
- Poor or No Product Disclosure: Transparency is crucial; lack of information is concerning.
- Promises of Unrealistic Returns: High returns can often signal scams; if it seems too good to be true, it probably is.
In light of these potential scams, ASIC strongly recommends that Australians seek independent financial advice when considering any changes to their superannuation. Furthermore, for individuals looking to consolidate their superannuation accounts or track down lost funds, the Australian Taxation Office (ATO) offers a free and accessible service through myGov.
The overarching message from ASIC is clear: if you find yourself in doubt or feeling pressured during any conversation regarding superannuation, it is advisable to disconnect the call and seek professional guidance. Taking proactive steps to protect your retirement savings is paramount in this increasingly convoluted landscape of superannuation offering.
