Four in five Aussies (81%) think that their superannuation fund should work hard to protect them from scams and fraud, a recent Super Consumers nationally representative survey has found.
Unfortunately, only 17 trustees plan on meeting this community expectation, says Super Consumers Australia which states that it welcomes the Financial Service Council’s Scam Mitigation Standard, but more work is needed from the federal government to fight scams in superannuation (‘super’).
The Financial Services Council (FSC) published its new Scam Mitigation Standard on 1 July 2024 which requires its super fund members to have clear policies and procedures in place for dealing with scams and fraud, including enabling multi-factor authentication for high-risk transactions.
More needs to be done
Super Consumers Australia’s policy manager Ms Rebekah Sarkoezy said, “Only the funds which are members of the Financial Services Council must comply with the new Standard. This means only roughly a quarter of people with super will benefit from the improved measures.”
She added, “We’re calling on the whole industry to adopt the practices set out in the standard, as a minimum. Until it does, members’ retirement savings are at an elevated risk of being stolen by scammers.”
While the Standard won’t be mandatory until 2026 and touches on only a few aspects of scam and fraud prevention, it’s a welcome first step to lifting the bar on account security and scam prevention in super, says Super Consumers Australia.
“Self-regulation will never be the solution to an operational risk as severe as scams and fraud. The super system is only as strong as its weakest link. We’re calling on the government to fast-track a super anti-scams code to protect people from organised criminals out to steal their super.”
“Multi-factor authentication is just one piece of the puzzle. Other protections like better scrutiny on identification documents and robust information-sharing requirements must be features of a mandatory super anti-scam code.”
Earlier in the year, Super Consumers found that as many as 178,000 super fund members were at an increased risk of being targeted by scammers due to super fund data breaches.
Super Consumers Australia was founded in 2013 as a voice for consumers in the superannuation sector. It conducts research on superannuation and makes policy recommendations for Australians to have access to high-quality super funds that help them secure financial well-being in retirement.