SMSF specialist advisers can play a key role in helping trustees and self-directed investors detect cybercrime and investment scams which have cost Australians more than $325 million in 2020.
SMSF Association chief executive John Maroney said the ATO’s Scams Awareness Week, which started today, “is an excellent time to remind SMSF members that there are extremely sophisticated scams circulating and that their retirement savings are an obvious target”.
“They need to be particularly alert to any offer, especially if there is the promise of higher-than-normal returns. The adage, ‘if something sounds too good to be true, it probably is’, is worth remembering when SMSFs receive unsolicited phone calls or emails offering investment advice,” Maroney said.
Scams have become more sophisticated to fulfil an illusion, but he acknowledged there can be warning signs to alert individuals.
“I can attest from personal experience just how sophisticated these scams can be when I was approached by ‘ASAL Group’, who claimed to be specialists in assisting people manage their SMSFs,” he said.
“It was a very slick approach. But the fact they claimed to be a subsidiary of a major financial institution, yet I had not heard of them, and promised returns of between 18-24 per cent just seemed too good to be true.
“I checked on the ASAL Group to quickly discover it was a scam and then alerted Australian Securities and Investments Commission (ASIC).
“To any SMSFs who find themselves in a similar situation, please consult with your specialist adviser, who will be able to verify whether the offer is genuine or not. And report the scam to ASIC – its website is very helpful in giving investors guidance about potential scams – to allow the regulator to inform the wider investing community.”
According to ASIC data accumulated in 2020, the amount lost to a range of investment scams totalled $328 million, which was 38 per cent of the $851 million lost in all scams in Australia that year.
“This is of particular concern in our sector as SMSF trustees and self-directed investors can be financially crippled by these scams,” Maroney said.
“We will endeavour to continue educating SMSF professionals, trustees and self-directed investors on how best to safeguard their retirement savings. There are many different types of scams in circulation and our role is to raise awareness, encourage conversation and promote vigilance to limit those in the SMSF sector from becoming the next scam victim.”
The ATO highlighted numerous scammers impersonate government agencies and said it would never send an email or SMS requesting people access its online services nor would it threaten immediate arrest, cancel tax file numbers, send pre-recorded messages or request payment via cryptocurrency, gift cards or other unusual methods.