ING-owned self-managed superannuation fund (SMSF) administrator Super Concepts has increased its vigilance in avoiding the setting up and servicing of funds that may potentially be used for illegal and fraudulent activities.
The new level of awareness was similar in theory to the measures the Australian Prudential Regulation Authority (APRA) recently suggested the larger superannuation funds adopt in order to prevent things like identity fraud and rolling over funds into illegal early access schemes, ING Australia head of technical services Graeme Colley said.
"If you have a look at the protocol, APRA is saying if there is a suspicion that a person is being used regularly, like a justice of the peace being used to sign off to transfer money, or there is money going to one post office box regularly when it shouldn't be, then maybe there is fraudulent activity going on," Colley said.
Super Concepts had adopted comparable practices to address the issue of fraud and, even though the firm only dealt with SMSFs, Colley said taking on higher levels of scrutiny and more stringent protocols would help ensure the quality and legitimacy of its clients.
"If we get large amounts of money coming in for funds that clients set up, they're likely to be there for a couple of weeks. They'll become clients in a short period of time, set up their trust deeds and the next minute the money's gone so as a client they're probably not worthwhile for us to pursue because of the time the fund is in existence," he said.
Recognising the danger, Super Concepts now has checks and balances in place to identify these types of clients upon their request to set up a new SMSF.
"We get quite a few a year coming in the door like this," Colley said.
