Scammers on the prowl – businesses lose millions to swindlers

What could HR do to avoid becoming prey to scammers?

BY Paulinet Tamaray 22 Jul 2022

Scam losses of Australians grew to over $2 billion, while small businesses had the highest median scam loss of $3.5 million, the latest Target Scams report showed.

The report, published by the Australian Competition & Consumer Commission (ACCC), said that government agencies received over 566,000 reports with documented losses of almost $1.8 billion. One-third of victims do not report scams, the report revealed. Thus, the actual losses are estimated at over $2 billion.

“Total scam losses more than doubled on the previous year’s total loss of $851 million, and based on early reports, losses are expected to double again in 2022,” Business Victoria said in a media release.

Vulnerable businesses

According to the government, micro, small, and medium-sized businesses are becoming the most vulnerable targets of scams, especially emailing false invoices and payment details.

“Small businesses (with 5 to 19 staff) had the highest median loss of $3,812 compared to other business sizes, with a total loss of $3.5 million,” Business Victoria said.

“Microbusinesses (with zero to 4 staff) had a median loss of $1,550 and a total loss of $3.5 million. Many other scam reports do not specify a business size,” it added.

Common scams targeting businesses

Based on the Target Scam report, “payment redirection” or business email compromise scam caused the highest losses to businesses with a total of $227 million.

According to Business Victoria, payment redirection happens when a scammer imitates a legitimate business, employee, client, bank, or vendor to lure the target into transferring money or sensitive information.

“Businesses reported the most losses to false billing scams (which includes many payment redirection reports) with $6.7 million reported lost and investment scams with $5.1 million lost,” the report stated.

How to protect your business?

As most scams have unfortunately continued to threaten people across all sectors, Business Victoria warned businesses to look out for the “signs” to avoid scams. Some of the most common signs, according to the government, are:

The email is unexpected. For example, the invoice came from a supplier you haven’t dealt with in a while, or the payment amount differs from previous amounts.
The email asks for an urgent payment or threatens severe consequences if payment isn’t made.
The email is sent from someone in a position of authority, particularly someone who wouldn’t usually send payment requests.
The email address does not look quite right. For example, the domain name doesn’t exactly match the supplier’s company name. Double-check by looking at previous correspondence.
The supplier provides new bank account details.

According to the government, employers must encourage their staff members to be cautious and check for anything suspicious before paying accounts. “If something doesn’t feel right, it probably isn’t,” Business Victoria said.

Business Victoria advised employers to contact their bank immediately when they have transferred money or any sensitive information.

“If any of your customers’ personally identifiable information has been compromised, mandatory reporting to the Office of the Information Commissioner (OAIC) may be required under the reportable data breaches scheme,” Business Victoria said.

“If you have been a victim of a cybercrime such as fraud, report it to the Australian Cybercrime Online Reporting Network (ACORN),” it added.

The government also said that scams should be reported to the Australian Competition and Consumer Commission’s Scamwatch.