ASIC has urged Australia's major superannuation funds to aid a crackdown on early release scams.
The regulator is investigating a number of "affinity frauds" in Pacific Islander communities in Sydney's south west.
Unlicensed planners are allegedly recommending that their community members access money in superannuation funds regulated by the Australian Prudential Regulation Authority and roll the cash into a self-managed super fund.
These unscrupulous planners charge a high fee and supposedly pays the tax, ASIC consumer protection execuive director and regional commissioner for the Australian Capital Territory Delia Rickard said.
"As you'd be aware, the tax penalties the consumer suffers in this situation would be significant. Savings are eroded and in other examples they just completely disappear," Rickard told the Conference of Major Superannuation Funds in Brisbane yesterday.
"It's really an appalling thing that we continue to see unscrupulous operators exploit consumers."
Rickard urged superannuation fund chiefs to look for the warning signs - patterns of members leaving or transferring funds - and to inform the regulator.
ASIC and the industry should work together to provide educational material to people retiring imminently to inform them of their options and warn them of scams, Rickard added.
The regulator and the Government's financial services working group are looking at ways to simplify disclosure around super funds.
Objectives include making product disclosure statements (PDS) shorter and easier to understand and reducing compliance costs. The proposals include internet-based disclosure..
Recent research has found 46 per cent of people could not understand a PDS.
At the conference, Rickard showed an interactive cartoon designed to educate teenagers about super.
Financial literacy has been made part of the core curriculum for all Australian primary and secondary schools.
