Australian business scams are on the rise, according to the Australian Competition and Consumer Commission’s (ACCC) 10th annual Targeting scams report, which details more than 5,800 scams reported by Australian businesses in 2018.

Losses resulting from the scams exceeded $7.2 million, a 53 per cent increase compared to 2017.

Much of this increase is due to the $3.8 million reported lost to sophisticated ‘business email compromise’ scams. When combined with losses reported to the Australian Cybercrime Online Reporting Network, these scams cost Australian businesses over $60 million. Despite these record loss figures, the true cost of scams is likely much higher as many scams are not reported. 

ACCC Deputy Chair Mick Keogh said the impact of the scams can be devastating. “Scammers are hacking business email systems and impersonating the intended payment recipient. The scammers request changes to bank account details so that the business makes the payment to the scammer instead of the legitimate business.”

“Depending on how long the scammers get away with this and how large the transfers are, this scam can be devastating to a business’s bottom line – to the extent of forcing small and medium businesses into closure,” Keogh said.

Any organisation that transfers money via bank accounts is a potential target. Businesses of all sizes and even small local sporting clubs and community groups have been targets of this scam. Scamwatch has even received reports of the hackers intercepting house deposits that have been sent to conveyancers, real estate agents or law firms.

Most likely to be targeted by scammers were small businesses with fewer than 20 staff, which accounted for more than 75 per cent of reports to the ACCC. Businesses were most likely to be targeted with false billing scams (1,819 reports) but investment, hacking and phishing scams also caused significant losses.

How can I protect my business?

Mr Keogh said Australian businesses must protect themselves by ensuring their staff are aware of these scams so they can identify and avoid them. "Every business should have clear processes for transferring money and a procedure for verifying requests to change bank account details that uses multiple modes of communication.” 

The ACCC provides a number of services for businesses to learn more about scams targeting them and how to protect themselves, particularly www.scamwatch.gov.au . Businesses can follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts.

The ACCC’s Small Business Information Network  will also update businesses with emails about new or updated resources, enforcement action, changes to Australia’s competition and consumer laws, events, surveys and scams relevant to the small business sector.

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