Payment redirection scams were the most financially damaging scams for Australian businesses in 2020, according to a new report released by the antitrust regulator.
The Australian Competition and Consumer Commission report - which compiled data from Scamwatch, government agencies, banks, and payment platforms - found that scammers took advantage of the financial uncertainty brought about by the pandemic to con Australian businesses.
Combined losses reported to Scamwatch, other government agencies, banks, and payment platforms totalled $128 million in 2020.
“Small and micro businesses made most of the reports to Scamwatch and experienced an increase in losses in 2020, although larger businesses reported the highest losses,” said ACCC deputy chair Mick Keogh.
Data revealed that false billing scams were the most reported scam by businesses and accounted for three-quarters of total losses to businesses.
Small and micro-businesses accounted for almost 60 percent of these false billing reports.
The most common type was payment redirection scams, also known as business email compromise scams, where scammers impersonate a business or its employees via email and request an upcoming payment be redirected to a fraudulent account.
The latest scams
The ACCC also pointed to a new type of scam targeted at farmers looking for a good deal on tractors and farm machinery. Scammers advertised equipment at prices well below market value and told farmers that they couldn’t view the tractors before purchase due to government restrictions from the pandemic. Farmers made payments to secure these special deals when the equipment never existed.
“One thing we know about scammers is that they will take advantage of a crisis,” Keogh said.
Businesses were also targeted by health and medical scams as firms attempted to procure personal protective equipment for their staff to comply with government guidelines during the pandemic.
Other scam types that hurt businesses throughout the year included phishing, identity theft, and hacking scams.
“It is so important for businesses to stay informed about scams so they can protect themselves,” Keogh added.
“The ACCC provides a range of resources for businesses on how to avoid scams Businesses can also report a scam to their banks but also ReportCyber, which is run by the Australian Cyber Security Centre and passes reports to law enforcement agencies for assessment and intelligence purposes.
The deputy chair also suggested firms contact the Small Business Information Network which also provides details 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.