The Australian Competition and Consumer Commission and WA Small Business Development Corporation have issued a warning to small business owners about online scams as part of Australasian Consumer Taskforce’s National Fraud Week.
The Australian Competition and Consumer Commission and WA Small Business Development Corporation have issued a warning to small business owners about the ever-present dangers of online scams as part of Australasian Consumer Taskforce’s National Fraud Week.
Research into online scams by Dr Paull Weber from Curtin University has found that small businesses can spend up to 100 hours dealing with the consequences of a scam. Some 70 per cent of the 291 small business survey participants reported wasted time or money thwarting a scam attempt, and 12 per cent lost money to a scam.
ACCC Deputy Chair Dr Michael Schaper said small business operators can be easy targets for scammers as they have fewer resources and are often pressed for time and that small financial losses to scammers can have a big impact on the viability of a small business.
Western Australian Small Business Commissioner, David Eaton, adds that scams often succeed because they look so realistic or try to take advantage of a busy office environment.
“We urge small business owners to implement preventative measures so staff members are aware of scamming behaviour,” Eaton said.
The ACCC’s 2012 Targeting Scams Report revealed that false billing scams are the most reported small business scams, with more than 2,500 complaints and $560,000 lost.
“One trick popular with scammers is to send businesses a subscription form disguised as an outstanding invoice so they sign up for unwanted and continuing advertising services,” Schaper explained. “They rely on business operators having lots of paperwork to process, with little time to check. Online shopping scams increased by 65 per cent in 2012, affecting both buyers and sellers and overpayment scams in particular are an easy trap for small business.”
Overpayment scams work when a scammer responds to a seller’s ad with a generous offer and then ‘accidentally’ overpays. The scammer will ask the seller to refund the excess amount by money transfer in hope that the seller will transfer the money before they discover that the scammer’s cheque has bounced or that the money order was phony.
To help your business avoid becoming a victim of such scams, here are some tips from the ACCC.
- Keep your filing and accounting systems well organised. This will make it easier for you to detect bogus accounts and invoices.
- Never provide personal information and banking details to anybody you don’t know and trust.
- Make sure the business billing you is the one you normally deal with and ask for the name of the person you are speaking to and who they represent.
- Never give out any information about your business unless you know what that information will be used for.
- Do not agree to offers or deals straightaway. Always ask for an offer in writing and consider getting independent advice if the deal involves money, time or a long-term commitment.
- Ensure that you have clear procedures for verifying, paying and managing accounts and invoices.
- Install reputable computer protection software and a firewall and keep them up to date.
- If you become aware of a scam, let other people and your industry association know about it.
For more information on how to protect yourself from scams, visit www.scamwatch.gov.au. And more reading on the subject can be found in this Small Business SCAMS Report from Curtin University.
Follow @mybusinessau on Twitter for breaking stories throughout the day.
Technologies in business: Some work, some don’t (yet)
By Adam Zuchetti
What business can learn from the military
By Adam Zuchetti
Veterans a smart choice for your business
By Adam Zuchetti