Combined losses reported to Scamwatch, other government agencies, banks and payment platforms totalled $128 million in 2020 - with Australian businesses losing $18 million to scams in 2020, a 260% increase on losses reported in 2019.
“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,” Australian Competition and Consumer Commission (ACCC) Deputy Chair Mick Keogh said.
The (ACCC) report says that based on Scamwatch data alone, false billing scams were the most commonly reported scam by businesses and accounted for three quarters of total losses to businesses - while small and micro businesses accounted for almost 60% of these false billing reports.
The Commission notes that there are a range of false billing scams, but the most common type was payment redirection scams, also known as business email compromise (BEC) scams, with 1,300 reports and $14 million in losses - a substantial increase from the 900 reports and $5 million in losses reported in 2019.
In a payment redirection scam, scammers impersonate a business or its employees via email and request an upcoming payment be redirected to a fraudulent account.
Scamwatch also observed a new type of scam in 2020 that targeted farmers looking for a good deal on tractors and farm machinery.
The ACCC says that scammers targeting farmers advertised equipment at prices well below market value, and told farmers that they couldn’t view the tractors prior to purchase due to government restrictions from the pandemic.
Farmers made payments to secure these special deals, when in reality the equipment never existed, with farmers conned out of $1.1 million in these scams.
“One thing we know about scammers is that they will take advantage of a crisis,” Commissioner Keogh said.
The ACCC reports that businesses were also targeted by health and medical scams in 2020.
About half of the $3.9 million in total losses reported to health and medical scams were from businesses, as they attempted to procure personal protective equipment for their staff to comply with government guidelines during the pandemic.
Other scam types that impacted 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,” Commissioner Keogh said.
“The ACCC provides a range of resources for businesses on how to avoid scams on the Scamwatch website and in our media releases throughout the year.”
The ACCC says that businesses that have been scammed should contact their bank as soon as possible. If the scam occurred on a platform such as Facebook, contact them directly to report it.
The ACCC encourages businesses to make a report on the Scamwatch website and they can also follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts for more information about current and emerging scams.
The Small Business Information Network 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.