‘No faith’: funds letting down Aussies on scam risks
Those protecting Australia’s $4.2 trillion superannuation savings need to do better to protect their members from scammers and fraudsters, the corporate watchdog says.
Pension trustees are lagging behind other sectors in communicating fraud risks and supporting targeted members, according to an Australian Securities and Investments Commission review of fund communications.
“Our latest review of superannuation website content confirmed that super funds often lack clarity, accessibility and support for victims of fraud,” Commissioner Simone Constant said in a statement on Wednesday.
“Compared to other sectors, super funds are inadequate for victims.”
The review, which examined anti-fraud and fraud content on company websites for clarity, relevance and prominence, found super funds were significantly lagging behind banks.
Banks scored positively on 80 per cent of the measured criteria, while super funds scored between 40 and 60 per cent.
The commission is seeking funds to remove games to protect Australians’ nest eggs, which could be $22 million lighter by 2025 due to fraud, according to the National Anti-Fraud Centre.
“Super trustees have a clear and unavoidable responsibility to oversee risk and ensure that these emerging threats are actively identified and managed,” Ms Constant said.
ASIC found that although most funds provide some form of information about fraud and fraud, it is often difficult to find, while some funds provide no information at all.
The quality of the information also raised the skepticism of the corporate watchdog; The content was often cited as “often outdated, generic, or overly complex.”
The review found that fewer than two in five funds clearly stated what a scam was, while a third did not provide any messaging about common warning signs.
Only a third of funds provided actionable information on how to prevent or report scams, and only a fifth had a specific contact method to report fraud or scams.
Consumer advocate Super Consumer Australia backed the report and called on the federal government to add super funds to the national Fraud Prevention Framework rollout.
The framework sets rules and requirements for businesses in segments targeted by fraudsters, but so far it only applies to banks and financial firms, telecommunications providers, and digital platforms such as social media and messaging services.
“After another year of inadequate action, we have no faith that the industry will solve these problems on its own,” said Xavier O’Halloran, chief executive of the advocacy group.
Poor customer service and limited call center hours have also left Australians at risk of fraud.
“Fearful that they may be the victim of a scam or scam, people can’t even call their super fund to get help,” Mr O’Halloran said.
He would like to see enforceable customer service standards put in place.
“It is time for the super sector to play its part in safeguarding Australia’s financial system and protecting its members’ retirement savings from fraud and fraud.”
The AAP has sought comment from industry representative the Association of Australian Superannuation Funds.
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