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Small and micro businesses lost $13.7 million to scams last year, with payment redirection scams accounting for the biggest losses, an ACCC report reveals.
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Small business scam losses almost double in 2022
18 April 2023
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Total losses to scams increased 73 per cent for Australian businesses last year, jumping to $23.2 million, according to Scamwatch data.
Micro-businesses with up to four employees were the worst hit, reporting a total of $8 million in losses to scams. This represents a 129 per cent increase from the previous year.
The ACCC Targeting Scams report indicated that across small and micro-businesses overall, total scam losses increased 95 per cent to $13.7 million in 2022.
Large companies with over 200 employees reported the smallest amount in losses at $980,000. However this was still a 132.8 per cent increase from the year before.
Medium size enterprises with between 20 to 199 employees was the only category that saw a reduction in scam losses in 2022, with losses falling 13.5 per cent down to $3.6 million.
NSW and Queensland were the worst-affected states, with businesses losing $6.5 million and $6 million in total in each state respectively.
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The most common business related scams were payment redirection or business email compromise where scammers either hack or impersonate a business’s email.
“They alter invoices or requests for payment by changing the bank account details. Many of these are reported to Scamwatch as false billing scams,” the Scamwatch report said.
All business sectors are being impacted by scams, but the typical targets have historically been high transaction industries such as real estate conveyancing firms or the construction industry.
The luxury travel industry was also targeted heavily in 2022 with international travel reopening after the COVID-19 border closures.
The report revealed that more broadly Australians lost a record $3.1 billion to scams last year, an 80 per cent increase from 2021.
Investment scams remain the highest loss category, accounting $1.5 billion of the total losses.
This was followed by remote access scams at $299 million and payment redirection scams at $224 million.
The ACCC said a more coordinated effort is required across government, the private sector and law enforcement to combat scams.
“Businesses need to be vigilant and implement effective monitoring and intervention processes to prevent scammers using their services and stop them when they do. Identity, verification and communication processes need constant review as scammers constantly evolve,” the report stated.
“We need to arm consumers with the tools to give them the best chance to identify scams, whilst recognising that humans aren’t going to stop being human any time soon.”
The ACCC is calling on the government to adopt solutions implemented in other jurisdictions which could help to mitigate some of the scam losses in Australia.
“The UK bank initiative to match BSB and account number to the intended recipient is one example. The SMS SenderID registry in Singapore is another. Measures such as these help make systems safer,” it said.
“We are encouraged to see exploration of opportunities like these but there is more work to be done to ensure that scammers do not find the weakest links.”
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