November 27, 2018
Scamwatch is calling on businesses to urgently review how they verify and pay invoices after reports that “business email compromise” (BEC) scams grew by a third this year.
“This is a very sophisticated scam, which is why many businesses only realise they’ve been caught out once it’s too late,” ACCC Deputy Chair Delia Rickard said.
BEC scams occur when a hacker gains access to a business’s email accounts, or spoofs a business’s email so their emails appear to come from the company.
The hacker then sends emails to customers claiming the business’s banking details have changed and that future invoices should be paid to a new account.
These emails look legitimate because they come from one of a business’s official email accounts.
Payments then start to flow into the hacker’s account.
In other variations of the scam, the hacker will send an email internally to a business’s accounts team, pretending to be the CEO, asking for funds to be urgently transferred to an off-shore account.
Hackers can also request salary or rental payments be directed to a new account.
Scamwatch has even received reports of hackers intercepting house deposits that have been sent to conveyancers, real estate agents or law firms.
“It’s a scam that targets all kinds of businesses, including charities and local sporting clubs,” Ms Rickard said.
“There is a misconception these scams target just small business, however the largest amount of reports and losses came from medium-sized businesses, including one that lost more than $300,000.”
Businesses reported losses to these scams totalling $2.8 million to Scamwatch in 2018.
However, this represents only a fraction of total losses to this variety of scam across Australia.
BEC scams cause businesses significant financial harm, accounting for 63 per cent of all business losses reported to Scamwatch, and the average loss is nearly $30,000.
“Effective management procedures can go a long way towards preventing scams, so all businesses should firstly be aware these scams exist and that their staff know about them,” Ms Rickard said.
“They should consider a multi-person approval process for transactions over a certain dollar threshold and keep their IT security up-to-date with anti-virus and anti-spyware software and a good firewall.”
“Businesses should also check directly with their supplier if they notice a change in account details.”
Scamwatch said it was vital a business did not do this just by return email or by using other contact details provided.
“Find older communications to ensure you have the right contact details or otherwise independently source them, so you can be sure you’re not contacting the scammer,” Ms Rickard said.
Businesses affected by BEC scams should contact their financial institution immediately and consider professional IT advice to ensure their email systems and data are secure from hackers.
Businesses can report scams to www.scamwatch.gov.au
They can also subscribe to Scamwatch on Twitter and Scamwatch radar email alerts to keep up-to-date with the latest scams affecting the business community.
