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Average super scam loss at almost $90k: AFCA
The Australian Financial Complaints Authority (AFCA) has urged super fund trustees to review processes in place to protect members from fraud amid increasing instances of sophisticated scam activity in superannuation.
Earlier this month, AFCA reported another record number of financial complaints in the 2023–24 financial year.
More than 105,400 disputes were received, marking a 9 per cent rise from the 96,987 complaints made in FY22–23.
Some 11,000 complaints were in relation to scams and less than 20 came from super fund members, said Heather Gray, AFCA lead ombudsman for superannuation.
“That’s pleasing – but not a reason for complacency by trustees or fund members,” she said.
“Scam-related complaints in super may be small in number but the average loss claimed was $88,736 and ranged as high as $344,000-plus – a potentially life-changing sum.
“In addition, in line with the trend in banking, we are starting to see instances of more sophisticated scam activity in superannuation.”
Gray said that trustees now “have a window of opportunity to act” to ensure it does not see scam-related issues observed in other sectors, by implementing measures like multifactor authentication to reduce the risk of fund members losing money from their super accounts through scams and other fraud.
“We are urging [trustees] to review the processes they have in place to help shield members from fraud, and to ward off any escalation of activity by scammers,” she said.
Looking at complaints of the last financial year, Gray said that, in some cases, a person known to the fund member used their personal information to take money, while in other cases, a third party had acquired their identification details in another way.
She also said “sometimes fraud was committed by an adviser engaged by the fund member in good faith”.
According to AFCA, scam complaints more broadly saw an 81 per cent rise over the last financial year.
In comparison, banking and finance complaints rose 11 per cent to 59,636 and general insurance complaints rose 4 per cent to 29,096, as at 30 June.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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