Is it a scam?

New data released

Naturally, people aspire to get the most out of their investments, especially if a great opportunity is presented by a ‘trusted’ organisation. However, investment scams occur more often than you may think, highlighting the risk both self-directed investors and SMSF trustees may potentially face when seeking ew investment opportunities.

New data released from Scamwatch Australia has reinforced the sophistication and rapidly growing number of scams each year in Australia – which has caused a loss of over $2 billion* in total in 2021 – $701 million of which related to investment scams. It is extremely important for you to remain vigilant and reach out to me, your trusted SMSF professional, before investing your retirement savings in a new product or service.  

*ACCC Targeting Scams Report July 2022

What does the 2021 data reported to Scamwatch Australia tell us?

During 2021, the average monetary value lost to scams has increased by 66%. Scammers have become more sophisticated in their approach, claiming to be from well-known investment organisations or government bodies, with the aim of extracting personal information from an individual.

Combined losses to investment scams have caused the most financial harm to the Australian population throughout 2021, climbing 135% to $701 million lost. Advancements in both technology and software design allow scammers to recreate websites to look identical to an actual organisation’s site, meaning it is becoming increasingly difficult to identify what is a scam and what isn’t.

Cryptocurrency investment scams reported $99 million lost in 2021. The increased popularity of cryptocurrency continues to see a surge in reported losses to investment scams. Also as cryptocurrency becomes the preferred method of payment across all types of scams, the perceived anonymity of unregulated cryptocurrencies can make it harder to recover funds or identify scammers.

Older Australians (65+) are often more at risk havinglost almost $82 million in 2021, more than any other age group. In 2021, a clear trend emerged with losses increasing with age, as the older population is often targeted by scammers as they are perceived to have more accumulated wealth.

The top contact methods used by scammers include phone (50%), text message (23%), email (14%), internet (4%) and social networking (4%)*. Scammers will often inject a sense of urgency into their messaging, propose threats (particularly with tax scams), and request personal and banking information.

*Scamwatch Australia Targeting scams report 2021

What should you do if you suspect a scam?

If someone attempts to scam you, there are several things you can do:

  • Report the scam to Scamwatch Australia – www.scamwatch.gov.au/report-a-scam or ReportCyber – Report | Cyber.gov.au immediately.
  • Do not provide any personal information that will allow a scammer to impersonate and retrieve your funds.
  • Do not click on links you have received via text or email that have a substantial number of letters and numbers.
  • If you have lost money to a scam, contact your financial institution immediately.
  • If you have provided personal information and you are concerned your identity may be compromised, you can contact IDCARE for free support on 1800 595 160.
  • Consider contacting the organisation the suspected scammer claims to work for – the organisation may be able to confirm your suspicions.

If you have been scammed or believe you have been scammed, you shouldn’t feel embarrassed or ashamed. Financial scams are now crimes which are occurring regularly with the latest Optus data breach only highlighting how many scams are very sophisticated and professional. Even very experienced investors have lost money to scams emphasising how it is more important than ever, to discuss the risk of scams with family, friends, and peers.

How can we help?

If you need assistance with identifying whether you are being approached by a scammer, please feel free to give me a call to discuss in more detail. I am here to support you and it’s important that we start the conversation as scamming is a continuous risk in our technologically advanced world. If you would like to seek more information about scams to protect your SMSF, you can refer to the SMSF Association’s trustee education platform, SMSF Connect.

What is a Director Identification Number (director ID) and do I need one?

You may have heard about the new rules which require directors of Australian companies to obtain a Director Identification Number (director ID). The new requirement to obtain a director ID also applies to individuals who have an SMSF with a corporate trustee, which is why I wanted to bring this new requirement to your attention. For members of your SMSF that do not already have a director ID, they will need to apply for one, before they are appointed as a director of the SMSF corporate trustee.

This document provides some important information about director IDs, including how to apply for one and by when.

An application for a director ID must be made individually and only by those who are applying for the director ID. As you are required to prove your identity as part of the process, our firm, or any other third party, is not able to apply for a director ID on your behalf. 

What is a Director Identification Number (director ID)?

A director ID is a unique identifier that directors need to apply for, like a tax file number. If you are a director of multiple companies, you are only required to have one director ID that will be used across all companies. You will keep your director ID forever even if you change companies, resign altogether from your director role(s), change your name, or move overseas.

Why do I need a Director Identification Number?

As part of the Government’s Digital Business Plan, it is rolling out a Modernising Business Registers program which includes the introduction of director IDs. The main purpose is to prevent the use of false or fraudulent director identities as well as to improve the efficiency of the system by making it easier to meet registration obligations and trace director activity and relationships. By improving the integrity and security of business data it is expected to reduce the risk of unlawful activity.

How do I apply for a Director Identification Number?

There are 3 key steps to apply for your director ID.

Step 1: Set up myGovID – If you do not already have a myGovID you will need to set this up before you can apply for your director ID online. You can find information on how to setup your myGovID by downloading the app at:  https://www.mygovid.gov.au/set-up  

Step 2: Gather your documents – You will need to gather some information that the ATO already knows about you to verify your identity. You will need your tax file number, your residential address held by the ATO, and information from two of the following documents:

  • Bank account details
  • ATO notice of assessment
  • Super account details
  • Dividend statement
  • Centrelink payment summary
  • PAYG payment summary 

Most of this information can be downloaded from your myGov account so it may be worthwhile linking to this service ahead of applying for your director ID. Note, myGovID is different to your myGov account. Your myGov account allows you to link to and access online services provided by the ATO, Centrelink, Medicare and more, while myGovID is an app that enables you to prove who you are and to log in to a range of government online services, including myGov. 

Step 3: Complete your application – Once you have a myGovID and information to verify your identity, you are ready to apply for your director ID. You can click on the following link to start the application process. The application process is quick and should take you less than 5 minutes. 

https://abrs.gov.au/persons/ui/secure/start/applyForDirectorID?action=applyfordirectorid

Further information about the application process, and step-by-step instructions, can be found via this link: https://www.abrs.gov.au/director-identification-number/apply-director-identification-number

By when do I need to have a Director Identification Number?

For individuals who are eligible to be appointed as a director of an Australian company,  any time after 5 April 2022, you must apply for your director ID before your appointment. This may be when your SMSF corporate trustee company is being established.

If prior to 5 April 2022, you were already appointed as a director then the deadline to get a director ID varies depending on when you were first appointed as a director of any Australian company. The table below outlines the various deadlines and we encourage you to contact our office if you are unsure which deadline applied to you.  

Date you first become a directorDate by when you must have applied for a Director Identification Number
On or before 31 October 2021By 30 November 2022
Between 1 November 2021 and 4 April 2022Within 28 days of appointment
From 5 April 2022Before appointment

How can we help?

If you have any questions or would like further information about director IDs, please feel free to give me a call, or arrange a time for a meeting, so we can discuss your requirements in more detail. Although we are unable to apply for a director ID on your behalf, we would be more than happy to guide you through the process.

For other information, resources and timely updates relevant to your SMSF, please refer to the SMSF Association’s trustee education platform, SMSF Connect.