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Superannuation scams – Scammers who want your super

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An offer to help you get your superannuation money early might seem like a great idea. But if you agree to it you could end up in a lot of trouble. Accessing your super before age 55 (at the earliest) is illegal except in very limited circumstances.

Here we explain how super scams operate so you can protect your retirement savings.

How super scams operate

The scammers say they can withdraw your super or move it to a self-managed super fund (SMSF) so you can pay off your debts or use the money for something you really want.

Once your super has been withdrawn or transferred, the scammer then takes a large commission or may even steal the entire amount for themselves.

By agreeing to the scam, you risk losing your hard-earned super savings. You may also unintentionally get caught up in tax penalties as a result of taking your super early. The scammers may even get you to sign false statements, exposing you to fines.

To find out more about when you can get hold of your super money, see our page on getting your super.

There is another type of super scam where scammers steal your identity and pretend to be you so they can transfer your super to a fake SMSF that they can access. Read more about how to protect yourself from this scam on the identity fraud webpage.

Who the scammers target

Promoters of illegal super scams often target people who are struggling with debt, people who are unemployed and those from non-English speaking backgrounds.

Case study: Kim’s super is taken by a scammer

Distressed Woman With Hand On HeadKim was desperate to pay off her car loan and credit card debt. She had $30,000 in her super fund and really wanted to use that money now, not in years to come. She saw an ad in her local paper saying she could get hold of her superannuation money now and phoned the number.

Greg answered her call and said all she needed to do was sign some papers to transfer the money into his self-managed super fund. Then Greg could give Kim 90% of the $30,000 and he would only take 10% commission. Kim thought this was a great idea so she signed the papers.

A few weeks later, Kim had still not received the $27,000 from Greg. She thought this was strange but believed the money would come soon. Then she got a call from the Australian Taxation Office letting her know she was up for a big tax bill as she had accessed her super.

She also got a call from an ASIC investigator who had received complaints from other people in Greg’s self-managed super fund who had not received any of their money. The investigator told Kim it was illegal to get hold of super funds before retirement and she was questioned about her dealings with Greg.

The investigator sent her the real bank statements from Greg’s fund. Greg had withdrawn all her money and there was nothing left.

The truth was that Greg had a gambling problem and ran the scam to fund it. Greg was already bankrupt, so there wasn’t much hope that Kim would get her money back.

Warning signs of a super scam

Promoters of illegal super schemes will try to get you to believe that anyone can access their super with their help.

Be alert to these signs of a super scam:

  • Advertisements promoting early access to super
  • Offers to ‘take control’ of your super
  • Offers of quick and easy ways to access or ‘unlock’ super
  • Unlicensed operators – see ASIC Connect’s Professional Registers or APRA’s Disqualification Register.

If you have been approached about accessing your super early, report it to ASIC via the online complaint form or by calling ASIC’s Infoline on 1300 300 630. You can also report it to the Australian Taxation Office by phoning 13 10 20.

Action ASIC has taken action against super scams

To find out more about the actions ASIC has taken over early release super schemes, see the following media releases:

When early release of super is legal

Early release of super is legal only in very limited circumstances: when you are experiencing financial hardship or on ‘compassionate grounds’. For more information, contact your adviser at Tailored Lifetime Solutions.