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6 tips to protect your SMSF against fraud

Christine St Anne  |  27 Jul 2012Text size  Decrease  Increase  |  
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Christine St Anne is Morningstar's online editor.


Not long after his wife's death, 65-year-old Steve received an unexpected call regarding an investment opportunity. The caller was professional, with a good knowledge of investment issues. He answered all of Steve's questions.

Steve received follow-up calls from "senior advisers". As a retiree, he felt his superannuation was not performing too well and decided to take up the opportunity.

He was referred to a website and set up a login account. Over the next 12 months, Steve made a number of investments and noticed his investment increasing in value. Steve's overall investment was $200,000.

The opportunity proved to be a scam. He only realised this when the website went down and he could no longer access the account or contact the offshore company by phone.

He did not report the scam. However, police eventually contacted him after finding out details of bank transfers he made to the fraudulent company.

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Unfortunately, the authorities could not recover Steve's $200,000 investment.

The above example is based on an actual case identified by the Australian Crime Commission (ACC).

According to the ACC, more than 2600 Australians have been defrauded of $113 million in recent years. The average person has lost $42,348, with losses ranging from $35,000 to $4 million.

While the fraudsters are targeting any person with money to invest, the ACC says the victims are usually men over the age of 50 who have made previous investments.

Many of these victims were members of self-managed superannuation funds (SMSFs).

Retirees or people nearing retirement are also particular targets for these fraudsters, as they have relatively large amounts of money to invest.

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