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Super funds failing on financial abuse

Mike Taylor8 July 2024
Three wise monkeys

Superannuation funds have been identified as falling short on identifying and dealing with financial abuse.

Consumer group, Super Consumers Australia has told a Parliamentary committee that “On the whole, super funds are simply not prepared or incentivised to respond to financial abuse in line with best practice”.

I doing so, it told the Parliamentary Joint Committee on Corporations and Financial Services that in a survey of 10,000 partnered women, more than 1 in 10 (14%) victim-survivors experiencing financial abuse reported being pressured or coerced into giving a perpetrator access to their superannuation”.

Further it said that Australian Financial Complaints Authority (AFCA) determinations had shown egregious examples of super industry responses to financial abuse and domestic and family violence (DFV).

“AFCA files are littered with examples like a super fund sending updated address details to the address a member is fleeing, or insisting on online-only account administration despite a member’s lack of internet access due to leaving a DFV circumstance,” the SCA said.

“Poor account security standards in super mean it is possible for perpetrators to access super accounts, changing beneficiaries or making account withdrawals without the victim-survivor knowing,” the submission said.

It said that while some financial abuse-specific guidelines exist in super, it is clear that these are not prompting appropriate industry responses across the board.

“Unlike other sectors, there is no requirement for funds to adhere to best practice responses to financial abuse, or even have a publicly available DFV or financial abuse prevention policy,” the SCA submission said.

The submission said that, at a minimum, super fund industry responses to financial abuse need to:

  • Minimise the need for customers to repeat disclosure,
  • Include robust payment monitoring and flagging to identify abuse,
  • Protect victim-survivors’ privacy and accounts from perpetrator access,
  • Incorporate best practice support service referrals and customer service responses, and
  • Involve developing a DFV and/or financial abuse policy, ensuring this is available publicly on funds’ websites
Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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