AUSTRAC zeroes in on funds around early access fraud

The financial crimes regulator has been taking an eagle eye to super funds’ processes around the early release scheme, saying they should do more internally to detect and report those using the scheme for nefarious purposes.

Speaking as part of AIST’s digital Conference of Major Super Funds, the superannuation body’s head of advocacy Mel Birks said funds had reported increased engagement with AUSTRAC following the fraud on the early release system in early May.

Ms Birks said the intelligence agency had suggested funds should be reporting those applying for the scheme who were not eligible as potentially suspicious.

“AUSTRAC have been discussing with trustees what their obligations might be in relation to individuals who are ineligible,” Ms Birks said. 

“[For] an individual who ticks a box to say they’re eligible when they’re not, AUSTRAC have said funds should consider whether a suspicious matter reporting obligation arises if you suspect a member who is claiming their super is ineligible.”

The comments come following recent data from credit bureau illion, which analysed the bank transactions of 13,000 people who had withdrawn money under the early access scheme and found 40 per cent had experienced no drop in income as a result of the COVID crisis.

Ms Birks said if super funds had access to information showing an individual had not seen a drop in super contributions, it could represent evidence an individual may be misusing the scheme.

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“If you are aware they’re still working full time, they’re still receiving further contributions and you have additional insight into their work conditions ... if a fund thinks they have an SMR obligation based on what they are seeing, the AML/CTF rules require the fund to apply enhanced due diligence,” she said.

The regulator had asked super funds to conduct “more detailed analysis and monitoring of members’ transactions” if they suspected members of fraudulently accessing funds through the scheme, Ms Birks said.

AUSTRAC zeroes in on funds around early access fraud
AUSTRAC zeroes in on funds
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