Fraud in Queensland is defined as deceitful, dishonest or wrongful behaviour for personal or financial gain, such as obtaining property, goods or services for the advantage of oneself or a third party. Loan fraud and superannuation scams is this area of law as applied to loans and superannuation schemes. To prove fraud, it must be established that the accused person made a false representation to another party, which the other party relied on and suffered damage as a result.
Loan Fraud
What is loan fraud?
Loan fraud, while not new, has become easier to perpetrate with advancements in technology. It is defined as a material misstatement, misrepresentation or omission that is relied on in a loan application. Both borrowers and lenders can perpetrate it. Fraud can occur in various loans, such as mortgages, personal loans and credit cards.
Due to the large amount of documentation involved in securing a mortgage, numerous ways exist for committing fraud during the mortgage lending process. These include:
- Understating debts
- Overstating the value of assets
- Overstating income or savings
- Using false employment details
- Claiming false residency status
Mortgage and loan fraud can be committed by any party in the loan transaction chain, such as the loans officer, mortgage broker, real estate agent or property valuer. The reasons for committing loan fraud include desperation, the perception of lenient penalties and the demand for fast loan approvals.
Consequences of loan fraud
- Suspension or loss of financial licence
- Withdrawal of investor support for lenders
- Unfavourable credit checks for a borrower
- Forced sale of a property
Who is liable for loan fraud losses?
If a borrower commits fraud, they are liable for the losses incurred by the lender and broker. If a broker commits fraud, they are liable for the losses incurred by the lender. This applies when a broker fails to follow a lender’s procedure which would have exposed the fraud. A broker may sue a lender for damages if the lender’s systems, training and rules are inadequate or not being followed.
Defences available for fraud charges include duress (being forced or coerced into committing fraud) and mistake of fact (making an honest and reasonable mistake).
Superannuation Fraud
What is superannuation fraud?
Superannuation fraud refers to the improper flow and control of superannuation money. It includes:
- Gaining access to superannuation when ineligible
- Failure to make compulsory payments
- Misappropriation of assets
- Improper or fake loans
- Improper use of fund assets
- Collusion between trustees and fund managers to improperly divert assets, charge excessive fees or pay unauthorised expenses
Superannuation scams
Superannuation account holders can fall victim to fraudsters who use various tactics. These tactics include:
- Offering free superannuation reviews and upfront cash incentives
- High-pressure offers and time-sensitive offers
- Unusual investment opportunities that are often overseas and unregulated
- Unsolicited contact by phone, online or by post
- Offering early access to superannuation funds
- Impersonating businesses or government agencies
What are the penalties for superannuation fraud?
Under the Superannuation Industry (Supervision) Act 1993 (Cth), there are civil and criminal penalties for superannuation fraud. The penalties range from an infringement notice to imprisonment. Proceedings must be commenced within six years of the fraud. Defences available for fraud charges include duress (being forced or coerced into committing fraud) and mistake of fact (making an honest and reasonable mistake).
Action
If you suspect or are involved in loan fraud or superannuation scams, take immediate action to safeguard your interests. Document all communications and transactions, and report suspicious activities to the relevant authorities.
Seeking Advice
For legal advice and assistance, book a consultation with Fox Piper to discuss your matter and explore your rights and options. Prompt legal action can help mitigate risks and protect your interests in fraud-related issues.
Conclusion
Being aware of the risks and consequences associated with loan fraud and superannuation scams is crucial. Seeking timely legal advice can help protect your rights and navigate the complexities of fraud-related issues. For personalised advice and assistance in Queensland, book a consultation with Fox Piper.
