Urgent – In Strictest Confidence

24 Apr 2013

By Belinda Von Knoll

We have all had them - those letters from Nigeria where the poor writer of the letter is desperately trying to get millions out of the country and needs our help. All you need to do is hand over your bank account and contact details and in return you will get 20% of $50 million for your help!

Although we may laugh at the thought of anyone falling for this scam it still happens and now it has become so sophisticated there are hundreds of victims each year.

At the recent SPAA (SMSF Professionals' Association of Australia) National Conference one of the speakers was from the Australian Crime Commission (ACC). Organised crime is now costing Australia at least $10-$15 billion a year and emanates from all corners of the globe. A large proportion of this crime is now in the financial sector – it has become a less risky way than drugs for criminals to make money!

Due to the highly sophisticated nature of these criminals it is not an easy pick up for victims as the traditional letter from Nigeria may have been. Although the process starts with a cold call the caller already knows a significant amount of information about the person they are calling, making them appear more legitimate. The data is gathered from many sources open to the public such as share registries, surveys, competitions and via the online theft of personal data. The callers, although based offshore, are frequently expats and are backed by sophisticated processes such as legitimate-looking websites and brochures.

The impact of this fraud is significant with the loss of retirement savings which in turn impacts upon health and family and flows through to the need for government services. It also results on investment funds being diverted from Australia.

The surprising part to me was the typical victim profile – they are males, over 50, well educated, financially aware, have invested before and have ready access to savings. The highest risk sectors are retirees or those approaching retirement – the targeting is not random.

Australia has become a target due to our strong economy and our $1.3 trillion pool of retirement savings (the fourth largest in the world). And with low investment returns from the GFC there are many receptive victims looking for high yield 'opportunities'.

The advice from the ACC to victims is to:

  • Let your family and friends know about these scams. The more people who are aware the less likely they are to be scammed.
  • Report suspected fraud to ASIC via www.moneysmart.gov.au or call 1300 300 630.
  • Hang up on cold calls.
  • Check that any company offering investments has a valid Australian Financial Services Licence (AFSL).
  • And most importantly seek independent financial advice before making an investment.

Fraud is a serious worldwide and growing threat and here in Australian we have a significant retirement savings pool at risk. There is a co-ordinated government response underway but we all need to be vigilant and raise public awareness of this important issue and protect our hard earned retirement savings.

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