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Superannuation fraud on the rise
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| Stuart Forsyth
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Regulators and industry experts have questioned whether investors' money is still safe in the superannuation system, considering the growing incidents of super fund fraud.
Speaking at the Fund Executive Association conference in Melbourne, director of KPMG Forensic, Peter Morris, used damning figures from their upcoming annual fraud survey to question whether super funds are failing to train their staff in fraud awareness.
Only one-third of fraud incidents were being detected by super funds, Morris said.
According to KPMG figures, 53 per cent of respondents to the survey said they experienced an incident of fraud - up from 45 per cent last year.
The total amount of money being lost to fraud has jumped from $44 million to $345 million over the past two years, Morris said.
Poor internal controls were letting fraud occur, he said.
Super funds are not picking up indications of fraud, and if they do have fraud awareness training, then they might not be updating their training, Morris said.
A number of super funds don't have ideal fraud reporting mechanisms in place, and therefore don't know where to go when they suspect fraud is occurring, he added.
It took 372 days for fraud to be detected, and the value of fraud grew the longer it took to be detected, KPMG found.
Australian Taxation Office assistant commissioner Stuart Forsyth questioned whether investors' money was safe in the super fund system, considering the growing occurrence of identity fraud.
There were 61 attempts of both successful and unsuccessful identity fraud in the super fund system over the past four years, Forsyth said.
Criminal gangs have made a number of attacks on super fund money in the past few years, he said.
Vision Super compliance manager Andrew Margetts said staff needed regular training to pick up instances of fraud.
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