ASIC warns super funds over lack of scam regime | Australian Markets

The Australian Securities and Investments Fee (ASIC) has fired a shot over the bows of superannuation funds after figuring out important weaknesses in funds’ anti-scam regime.

In an open letter to the superannuation funds, ASIC outlined what it sees as “weak trustee practices relating to scams and fraud”.

“Our recent review of trustees’ practices in preventing, detecting and responding to scams identified several areas of weak trustee practices,” the letter stated.

“The review distinguished between fraud (or unauthorised transactions) and scams. Within the case of a rip-off, a member has been tricked into both:

• transferring funds out of their superannuation account to a scammer, or
• aiding a scammer to make a switch (e.g. by offering a scammer who could also be “impersonating the superannuation fund with a one-time password).

The review discovered that trustees have been overly reliant on anti-fraud measures and had restricted give attention to the particular dangers and harms related to scams. For instance, they centered on confirming that the individual requesting a switch was the member somewhat than on the lookout for flags to point that the member might have been tricked.”

“We found that trustees did not have sufficient oversight of their external administrators’ anti-scam and anti-fraud practices,” it stated.

“For example, in our engagement with trustees, they frequently referred in general terms to their administrators’ systems and processes, but sometimes lacked knowledge about key details. One of the trustees we engaged with was unable to identify whether its administrator undertook basic interventions, such as engaging with members over scams.”