How are fake SMSFs set up in someone else’s name?

The ATO describes SMSFs being registered without the member’s knowledge, with super rolled into an account controlled by the fraudster. The ATO sends alerts when a rollover or a change of details is requested, and tells professionals to verify a new client’s identity. Victims should phone the ATO on 1800 467 033.

Sources for this answer

The ATO describes cases where SMSFs were registered without the member’s knowledge and super was rolled into an account controlled by the fraudster. [S14]
The ATO sends an alert when a rollover is requested, and when a change of details is requested, such as adding a new member to an SMSF or changing the SMSF bank account details. [S14]
If you think someone used your personal information to set up an SMSF under your name, phone the ATO on 1800 467 033, between 8 am and 6 pm AEST, Monday to Friday. [S7]

What the ATO sees

The ATO says identity fraud and investment scams are a top priority in the SMSF sector, because the impact can be devastating with some victims losing all of their retirement savings.

Funds registered without the member’s knowledge.
Super rolled into an account the fraudster controls.
Some tax agents unwittingly caught up in registering fraudulent funds.

Facts and sources for this part

The ATO says identity fraud and investment scams are a top priority in the SMSF sector, because the impact can be devastating with some victims losing all of their retirement savings. [S14]
The ATO describes cases where SMSFs were registered without the member’s knowledge and super was rolled into an account controlled by the fraudster. [S14]
The ATO tells tax professionals asked to register an SMSF for a new client to verify their identity, because some tax agents were unwittingly caught up in registering fraudulent funds. [S14]

The safeguards

Alerts when a rollover or a change of details is requested.
Additional proof of identity checks encouraged by APRA before a rollover into an SMSF.
Identity verification of new clients before a fund is registered.

Facts and sources for this part

The ATO sends an alert when a rollover is requested, and when a change of details is requested, such as adding a new member to an SMSF or changing the SMSF bank account details. [S14]
APRA has encouraged the funds it regulates to undertake additional proof of identity checks before rolling money over into an SMSF. [S14]
The ATO tells tax professionals asked to register an SMSF for a new client to verify their identity, because some tax agents were unwittingly caught up in registering fraudulent funds. [S14]

Why an auditor may be the first to notice

A victim may never have seen the fund’s bank statements, and the fraudster is unlikely to raise the alarm. An auditor who asks a member for a signed letter, or asks who set up the bank account, may be the first professional to speak to the real person. A member who has never heard of the fund is the clearest warning sign.

Facts and sources for this part

The ATO describes cases where SMSFs were registered without the member’s knowledge and super was rolled into an account controlled by the fraudster. [S14]

If it has happened

If someone used personal information to set up an SMSF under your name, phone the ATO on 1800 467 033, between 8 am and 6 pm AEST, Monday to Friday. The ATO also says you must report all tax-related security issues to it. If you are an auditor who meets a member who never set up the fund, stop and escalate inside your firm.

Lesson 3Stolen identities and fake SMSFs4 min

Facts and sources for this part

If you think someone used your personal information to set up an SMSF under your name, phone the ATO on 1800 467 033, between 8 am and 6 pm AEST, Monday to Friday. [S7]
The ATO says you must report all tax-related security issues to it, and that anyone holding tax or superannuation data (including TFNs) for clients who suspects a breach should phone its Client Identity Support Centre. [S7]