How do SMSF rollover and investment scams work?

People are cold called or emailed and asked to move their super into a new SMSF. Scammers pretend to be advisers, promise high returns, and use the victim’s ID to set up a fund and bank account they control. The balance then goes to the scammers. ASIC’s advice is always to verify who you are dealing with.

Sources for this answer

ASIC’s scam alert says people are cold called or emailed and asked to transfer funds from an existing super account to a new SMSF, and the balances are instead sent to bank accounts controlled by scammers. [S9]
They use the identification documents the victim provided to set up the SMSF and its bank account in an account fully controlled by the scammers. [S9]
ASIC advises people to always verify who they are dealing with before handing over ID, personal details or money. [S9]

How it works

A cold call or email asks the person to move funds from an existing super account.
Investors are often promised high returns of 8% to 20% (or more) per annum.
Company names, email addresses and websites are similar to real licensed companies.
A legitimate company is used so the SMSF is properly established.

Facts and sources for this part

ASIC’s scam alert says people are cold called or emailed and asked to transfer funds from an existing super account to a new SMSF, and the balances are instead sent to bank accounts controlled by scammers. [S9]
Investors in these scams are often promised high returns of 8% to 20% (or more) per annum. [S9]
The scammers use company names, email addresses and websites similar to real Australian companies that hold a financial services licence, and use a legitimate company so the SMSF is properly set up. [S9]

Red flags

ASIC lists the website disappearing, speaking to different people who have the same voice, and changing email addresses and contact details. The ATO adds that scammers impersonate well-known Australian companies and use personal details to gain trust.

Facts and sources for this part

ASIC lists the website disappearing, speaking to different people who have the same voice, and changing email addresses and contact details among the red flags. [S9]
The ATO says scammers pretend to be financial advisers, encourage people to transfer their super into a new SMSF or investment product, and impersonate well-known Australian companies. [S14]

What trustees can do before they act

ASIC advises always verifying who you are dealing with before handing over ID, personal details or money.

Never give a licence or tax file number to someone who rang you.
Look up any adviser yourself, using a number or website you found independently.
Ring your existing super fund on its published number before approving a rollover.

Facts and sources for this part

ASIC advises people to always verify who they are dealing with before handing over ID, personal details or money. [S9]

What an auditor can ask

A new fund with a large rollover and an investment the trustee cannot explain deserves care before anything is signed.

Who introduced the trustee to the fund?
Who set up the bank account, and who holds the login?
Can the trustee explain the main investment in their own words?

Lesson 2Investment scams that target your trustees4 min

Facts and sources for this part

They use the identification documents the victim provided to set up the SMSF and its bank account in an account fully controlled by the scammers. [S9]