POWERED BY MOMENTUM MEDIA
ASIC pens open letter, urges funds to up scam and fraud controls
ASIC has called on superannuation funds to strengthen anti-scam measures after a review found trustees lacked comprehensive scam strategies and oversight of administrators’ fraud controls.
ASIC on Thursday addressed an open letter to superannuation funds urging them to strengthen anti-scam practices or risk exposing members to harm.
The open letter, signed by ASIC commissioner Simone Constant, outlined the regulator’s guidance for superannuation trustees in preventing, detecting, and responding to scams and fraud activity.
It follows an ASIC review of 15 superannuation trustees, which found none had an organisation-wide scams strategy in place.
“The review found that trustees were overly reliant on anti-fraud measures and had limited focus on the specific risks and harms associated with scams. For example, they focused on confirming that the person requesting a transfer was the member rather than looking for flags to indicate that the member may have been tricked,” Constant said.
Moreover, the commissioner said that trustees lack oversight of administrators’ anti-scam measures, with some unaware of basic fraud interventions.
“Trustees generally reported that they had not seen many, if any, instances of scams impacting their members. Several trustees told us that this was the reason for their limited focus on scams,” she said.
Constant concluded the letter by urging trustees to assess their fraud controls, review ASIC reports on banking practices, assign scam oversight to an accountable person, and collaborate with industry peers to boost protections.
In response to the letter, ASFA issued a statement pushing back against the regulator, and accusing it of ignoring the “significant steps” the sector has taken to effectively protect super savings.
“ASIC’s letter to superannuation trustees, released first to the media, seemingly ignores the super sector’s proactive measures to tackle these rare super scams, measures which ASIC is aware of,” said ASFA CEO Mary Delahunty.
“In the media statements this morning, ASIC appears to have come to the confusing conclusion that no evidence of scams existing or increasing means that the scammers are winning – instead of the other more reasonable conclusion, that the work of super funds and their services providers is effective. We hope that ASIC can recommit to constructively working with ASFA members to tackle the small, but important risk of scams in super.”
Labelling super funds as “some of the safest places in the country to have your money”, Delahunty said the sector isn’t “sitting back and taking our very low rates of scams and financial crime for granted”.
“We note the specific concerns ASIC has identified in their letter today and we commit, through the FCPI, to working on these,” she said.
Earlier this month, ASFA addressed a submission to the Senate Economics Legislation Committee – Scams Prevention Framework Bill 2024, a bill which if enacted would require social media companies, banks and telcos to “take robust steps” to prevent and respond to scams.
While superannuation is not included in the first round of the SPF, previous government consultation said it could be added later if scam activity shifts. Citing this possibility and the sector’s efforts to combat financial crime, ASFA said it felt a submission to the inquiry was necessary.
Among the suggestions it made, ASFA urged the government to consider whether ASIC may be a more appropriate SPF regulator for the superannuation sector than the ACCC if the scheme is extended to superannuation.
“This may avoid regulator duplication and the overextension of ACCC resourcing,” ASFA said.
It also urged the government to conduct extensive consultation with the super sector before creating a sector-specific code.
“This should include the opportunity for written submissions on the content of the code. The code should also use existing industry frameworks as its basis,” it said.
Moreover, ASFA argued for clearer definitions for ‘scam’ and ‘actionable scams intelligence’, as well as clarity around how SPF’s information-sharing rules align with AML/CTF, Suspicious Matter Reports, and Privacy Act obligations.
Recommended for you
Super industry assets have seen an almost 40 per cent increase in the last five fiscal years, new data has unveiled.
A February rate cut is looking more likely after the latest CPI data revealed a reduction in the trimmed mean CPI to 3.2 per cent, with three out of the four major banks tipping an imminent reduction is on the cards.
Tech and financials are poised to deliver several global “dividend darlings” this year, an investment manager has highlighted.
The Financial Services Minister has announced that he will retire from federal politics at the next election.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Ausbil Active Dividend Income Dis AUD
127.58 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
