Big four firm warns on rising SMSF fraud threats
One big four firm has warned on the threat of "fraudsters" in the superannuation industry, with its research showing a spike in the multi-million-dollar value of fraud crime in Australia.
Research from KPMG showed that for the period September 2015 to March 2016, 116 frauds occurred, with a value of $381.1 million – an average value per fraud of $3.3 million.
This compares with 91 frauds with a value of $128.4 million, at an average value per fraud of $1.4 million, for the previous six-month period.
Interestingly, 26 per cent of frauds used technology to enable the fraud in the latest barometer results, including spoofed emails and online identity theft. This compares with 24 per cent of fraudsters using technology on a global level.
Speaking to SMSF Adviser, head of forensic at KPMG Australia Gary Gill said that given the size of the superannuation industry in Australia, fraudsters are attracted to it "like flies to food".
Mr Gill noted that setting up an SMSF can often involve various sets of hands, which can expose the end client to potential foul play.
He encouraged SMSF professionals to be particularly mindful when outsourcing clients’ compliance work to be thoroughly confident in the security of the outsource company.
"People often don’t think about risks associated with outsourcing to administrators, for example. It’s a case of knowing who you are dealing with, seeking them out, and monitoring what they’re doing.
"From an end investor perspective, it’s just being vigilant about who you’re engaging to act on your behalf and allowing to provide you with advice and services around managing the superannuation fund," he added.
"Make sure that you know who they are, you’ve checked out their accreditation, etc."