Superannuation funds urged to act against growing scam threats
Superannuation funds urged to act against growing scam threats
As superannuation funds come under increasing scrutiny for their vulnerability to scams, experts are urging the sector to take proactive measures to safeguard Australians' retirement savings.
BDO Forensic Services Partner, Conor McGarrity, said that while banks, telecom providers and social media companies have recently faced intense scrutiny over scam risks, superannuation funds are likely next in line.
“ASIC has already flagged its interest in scams targeting super funds and what it deems their lack of preparedness in addressing these risks,” Conor said.
“A recent review of 15 superannuation trustees revealed that none of them had an organisation-wide strategy to combat scams, highlighting a significant gap in the sector’s approach to protecting members’ funds.”
The risks for super fund members, particularly those aged 65 and older, are alarming.
“Super fund members generally have greater access to their retirement savings once they reach retirement age. Scammers are aware of this, and we know from our ongoing analysis of scam data that the over 65s remain the most targeted age cohort by scammers,” Conor said.
“This coupled with the fact this age group are likely to have higher super balances make them an attractive target to scammers.”
According to the Australian Financial Complaints Authority (AFCA), the average loss per scam-related complaint in the super sector was $89,000, with the largest individual loss reaching $344,000 in the 2024 financial year.
To mitigate these risks, Conor said super funds must take a more proactive stance.
“Education is key. Super funds need to provide members with practical information about the various ways scammers operate,” he said.
“Additionally, staying informed about emerging scam techniques - especially in light of the proliferation of AI - is crucial for ongoing protection.”
Fellow BDO Forensic Services Partner, Stan Gallo, added that many super funds rely on outsourced administrators and third-party providers, which introduces additional risks.
To counter this, Stan said super funds should ensure their external partners have robust anti-scam strategies in place and are fully equipped to respond to emerging threats.
“Complacency is not an option. Just because super funds have not been a major target for scammers in the past doesn’t mean they are insulated from such risks in the future,” Stan said.
“Scammers are constantly pivoting to target smaller institutions with older demographics, making them more vulnerable. Everyone, from regulators to consumers, has a role to play in safeguarding retirement savings.”
For media enquiries:
Tate Papworth
Manager, Media
E: Tate.Papworth@bdo.com.au
Ph: 0433411189