An attempt by Australia’s corporate regulator to put the $4.1 trillion superannuation industry on notice over scams has backfired with one industry peak body criticising the move for causing confusion by reaching a baseless conclusion.
The Association of Superannuation Funds of Australia (ASFA) trained its sights on the Australian Securities and Investments Commission (ASIC) after the regulator urged super trustees to strengthen anti-scam practices or risk exposing members to harm.
In a letter signed by Commissioner Simone Constant, ASIC outlined its guidance for trustees in preventing, detecting and responding to scams and fraud activity.
“With scammers employing increasingly sophisticated tactics to manipulate superannuation members, taking prompt and proactive steps to monitor and address scam activity is vital,” ASIC said in a media release.
The Commissioner’s letter followed an ASIC review of 15 trustees which found none had an organisation-wide scams strategy in place.
But ASFA said the regulator had reached the confusing conclusion that no evidence of scams existing or increasing meant scammers were winning instead of the more reasonable conclusion that super funds and their services providers were effective.
“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,” CEO Mary Delahunty said.
“We hope that ASIC can recommit to constructively working with ASFA members to tackle the small, but important risk of scams in super.”
ASFA said fewer than 20 (0.18%) of the 11,000 scams complaints received by the Australian Financial Complaints Authority (AFCA) last year were related to superannuation transactions.
“Superannuation funds are actually some of the safest places in the country to have your money,” Delahunty said.
Delahunty said the only way to move superannuation out of the super system was through the banking system, and banks already had rich data and systems to help identify scams and fraud.