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Payment redirection scams cost Aussie businesses $128 million

June 11, 2021 Headline News 1 Comment

Payment redirection scams were the most financially damaging scams for Australian businesses in 2020, according to the ACCC’s latest Targeting Scams report.

Combined losses reported to Scamwatch, other government agencies, banks and payment platforms totalled $128 million in 2020.

The report can be accessed here: Targeting Scams

Scammers love to cash in on a crisis. Reports to Scamwatch show that Australian businesses lost $18 million to scams in 2020, a 260 per cent 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,” ACCC Deputy Chair Mick Keogh said.

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. Small and micro businesses accounted for almost 60 per cent of these false billing reports.

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 1300 reports and $14 million in losses. This is 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. Scammers 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. Farmers were conned out of $1.1 million in these scams.

“One thing we know about scammers is that they will take advantage of a crisis,” Mr Keogh said.

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,” Mr 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.”

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.

Businesses can also report a scam to ReportCyber, which is run by the Australian Cyber Security Centre and passes reports to law enforcement agencies for assessment and intelligence purposes.

The ACCC encourages businesses to make a report on the Scamwatch website. 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.

Background:

The ACCC’s annual Targeting Scams Report includes data from Scamwatch, Report Cyber, other government agencies, banks and payment providers.

Top 5 scams by losses as reported by businesses in 2020 (Scamwatch data only)

Scam category Reported losses 2020
False billing $13,509,327
Health & medical product scams $2,053,745
Investment scams $1,674,473
Online shopping scams $496,947
Classified scams $200,911

Breakdown of 2020 scam reports by business size (Scamwatch data only)

Business size Number of reports Reports with loss Reported losses
Micro (0-4 staff) 1,304 173 $2,057,087
Small (5-19 staff) 1,056 153 $4,950,593
Medium (20-199 staff) 651 90 $1,578,852
Large (over 200 staff) 321 29 $9,031,213
Size of business not provided 852 49 $783,418
Total 4,184 494 $18,401,163

Edited by Peter Needham

Currently there is "1 comment" on this Article:

  1. Mark William Sheehan says:

    “Scammers love to cash in on a crisis.” Bottom-feeders LOVE a crisis… Before Hurricane HUGO devistated Charleston SC, locals happily left doors unlocked and items on the front lawn… The Looters that were arrested were from ‘out of town’…they clogged up jails and courts, and cost tax-payers $40,000 annually to keep them. Fake contractors took ‘Deposits’ for repairs and never returned to do the work. And break-ins to homes, before they could be made liveable, leapt. Nothing in comparison to the damage and losses by faces we can never even see, or it seems, hardly ever bring to justice. -An observation from my tread-mill. Peter Needham, thanks for sharing…

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