With the recent cyber attacks to Medibank Private and Optus, many of us are very concerned about our personal information being at risk. In addition, the prevalence of financial scams is increasing. Of the $4 billion expected to be lost to scams in Australia in 2022, scams targeting investments were the most significant with reported losses amounting to $292.9 million for the period ending 30 September 2022. As these investment scams continue to grow, they present a risk to all SMSFs trustees.
ATO issues warning on investment scams targeting SMSFs
The ATO has raised its concerns on the increase in scams involving fake superannuation investments targeting SMSFs. They warned that scammers are phoning and emailing people, pretending to be financial advisers or super experts. They are encouraging people to invest their super in a supposedly high performing SMSF’s by offering to do an online comparison with your existing fund and requesting personal information to enable this to happen. They are doing this by fraudulently using the name and Australian Financial Service Licence (AFSL) of a real business so they appear to be legitimate, but have already set up a fake website behind the scenes so they will, in fact, control your money from the moment you invest.
Other ATO related scams include:
- tax refund owing SMS texts / emails – there are being sent indicating that a tax refund is owed and to click on the hyperlink to complete the form in order to receive the refund;
- 2022 tax lodgment email scam – emails are being sent to confirm lodgment of the 2022 tax return, and to open an attachment to sign a document and complete their ‘to do list details’ which then gives the scammers access via a fake Microsoft login page designed to steal your login details;
- fake TFN/ABN application scams – these scams are often advertised on social media offering TFN/ABN applications for a fee;
- cryptocurrency tax evasion SMS and email scams – whereby scammers are pretending to be ATO officers and contacting people suspected of cryptocurrency tax evasion. They then request them to ‘connect their wallet’ via an email link;
- fake tax debt phone scam – again, fake ATO officers are calling people and advising they have a tax debt that needs to be paid immediately
- new ATO payment methods phone scam – scammers are tricking people into making tax payments by pretending to be ATO officers and other agencies including the Australian Federal Police, and advising payment methods include:
- ‘cardless cash’ ATM withdrawals
- retail gift cards, such as JB hi-fi, Myer and Woolworths
- courier services who collect the cash payments
- cash delivery made in person at a pre-determined public location.
The real ATO will never send you an SMS or email with a link to log into their online services account, nor will they ask for your credit card details.
ASIC warns of SMSF cryptocurrency scams
The value of cryptocurrency assets inside Australian self managed superannuation funds (SMSFs) increased by 589.9% ($1.17bn) between June 2019 and June 2022, according to the latest ATO statistics.
While cryptocurrency is a relatively small asset class at only 0.16% of the $837bn held in SMSFs, it is a growing asset class, larger than collectibles and personal use assets, and overseas property. Smaller funds, with an asset value below $200,000, are more likely to have a larger proportion of their value in cryptocurrency.
Earlier this year, the Australian Securities and Investments Commission (ASIC) issued a warning on an increase in marketing encouraging Australians to switch from retail superannuation funds to SMSFs so they can invest in ‘high return’ portfolios. The regulator states that crypto-assets are a high risk and speculative investment and best practice is to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund into an SMSF.
Examples of investment scams
- One Multi Services Pty Ltd, which was shut down by ASIC late last year. The company promoted a scheme encouraging investors to roll their superannuation into an SMSF, then for the SMSF to loan money to A One Multi to generate “returns of between 10% and 20% on the investment and perhaps as high as 26%.” Over 60 SMSFs transferred $25 million into A One Multi’s accounts between January 2019 and June 2021. The money “invested” for the clients, between $7 million to $22 million of Bitcoin, was held in the name of one of the directors. An additional $5.7m was used by the directors to acquire property and luxury cars;
- scammers installed “remove access” software on the investor’s smartphone and were able to setup an account in Coinspot (Australia’s biggest cryptocurrency exchange and gives users access to more than 320 different digital currencies) and transferred money from several bank accounts to Coinspot and then withdrew the funds
- the website of an investment manager from Irish brokerage company called Druid ICAV was duplicated by hackers and then investors were duped into investing via the fake website into fake crypto trading platforms
What should I do if I think I’ve been a victim of cybercrime?
If you think you have been approached by a scammer, the next steps are as follows:
- report the scam to Scamwatch Australia immediately – scamwatch.gov.au/report-a-scam
- if you have lost money to a scam, contact your financial institution immediately to make a complaint – How to Make a Complaint – Australian Banking Association (ausbanking.org.au). If you are unsatisfied with the response from the bank, a complaint can be made to the Australian Financial Complaints Authority.
- if you have lost personal information and are concerned your identity may be compromised, you can contact IDCARE for free support on 1800 595 160.
It is so important in this environment to be vigilant to protect the wealth you have accumulated. Don’t lose it now!
Kreston Stanley Williamson
*Correct as of 18 November 2022
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.
