Payment redirection tricks were financially devastating to Australian businesses last year, with more than $13.5 million scammed from companies of all sizes.
The Australian Competition and Consumer Commission’s (ACCC) annual Targeting Scams report detailed how local companies have been impacted by a range of scams such as phishing and identity theft.
Payment redirection scams were by far the most financially damaging scam for Australian businesses, accounting for more than $13.5 million in losses.
False billing scams, where a scammer impersonates a business or one of its employees via email to request an upcoming payment be redirected to a fraudulent account, accounted for three-quarters of the total losses.
There were 1,300 reports to Scamwatch of such tricks, with nearly $14 million in losses.
This is a significant increase from the previous year, which saw 900 reports and $5 million in losses.
The second most prevalent type of scam targeting Australian businesses related to health and medical products, with scammers taking advantage of the COVID-19 crisis.
Half of the reported $3.9 million in total losses from these types of scams were from businesses trying to buy personal protection equipment for their staff in order to comply with government requirements around the pandemic.
“One thing we know about scammers is that they will take advantage of a crisis,” ACCC deputy chair Mick Keogh said.
Other common types of scams reported to the ACCC included phishing, identity theft and hacking.
Investment scams cost Australian businesses $1.7 million in 2020, while online shopping scams netted $500,000.
A new type of scam targeting Australian farmers was also discovered by the ACCC last year, leading to $1.1 million in losses.
This scam also took advantage of the COVID-19 pandemic, with scammers advertising tractors and farm machinery at prices well below the market value, but telling farmers that they couldn’t be viewed prior to a sale due to government COVID-19 restrictions.
The farmers would then make the payment to secure the cheap price, but the equipment did not actually exist.
“It is important for businesses to stay informed about scams so they can protect themselves,” Keogh said.
The report found that the combined losses from scams reported to the ACCC’s Scamwatch, other agencies, banks and payment platforms totalling $128 million in 2020.
Losses of $18 million were reported to Scamwatch last year, a more than three-fold increase, or 260 per cent, from the previous year.
“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 Keogh.
Micro businesses with four or fewer employees suffered losses of $2 million from scams, while small companies with between 5 and 19 staff members lost nearly $5 million.
The largest losses came from larger companies with more than 200 employees, with $9 million in losses in 2020.
Australian businesses are advised to report scams directly to the ACCC’s Scamwatch, and to report them to Facebook if they occur on that platform.
The Targeting Scams report also found that Australians lost a total of $850 million to scammers in 2020, with scammers taking advantage of a number of crises including the bushfires and the pandemic.
In Victoria, where the longest lockdowns were seen, losses from scams doubled year-on-year.
Last year, Australians lost $850m to scammers – the largest ever amount in a single calendar year.