The FBI’s Internet Crime Complaint Centre (IC3) saw a 270 per cent increase in reports about business compromise scams in 2015 with average losses at $US130,000.
Scamwatch has received reports from Australian businesses demonstrating that this scam has also headed down under. Similar to the IC3, reported losses to Scamwatch have been for significant amounts generally over $10,000 and even some in excess of $100,000.
How the scam works
The ‘compromise’ starts with scammers getting access to a company’s email system via a virus or a phishing attack.
The sting comes when the scammer sends an email purportedly from the boss advising a financial officer about an urgent transfer of funds to a new account.
The email appears legit. It comes from the correct address with formatting and style closely resembling the real thing.
The email pressures the financial officer to move fast and in strict confidence to wire money to allow the company to strike a major overseas deal. The money sent is lost for good.
In other variations, the scammer sends an email to the company’s clients advising them of changes to payments arrangements. The change in accounts often goes undetected until someone challenges a bill or disputes a late notice.
Avoid falling victim
The FBI said the fraud targets businesses that work with overseas suppliers or regularly make wire transfer payments. This may include many Australian businesses.
The best way to prevent falling victim to the business email compromise scam is to:
- Put in place sound financial security procedures including a two-step verification process for wire transfer payments
- Advise payments staff to be suspicious of requests for secrecy or pressure to take action quickly to transfer money.
- Independently check and verify any request for updates to payment information.
- Install security software and keep it up to date.
Fraud Week
The ACCC is pleased to have the Institute of Public Accountants as a partner for the Australasian Consumer Fraud Taskforce’s an annual Fraud Week. The event, which starts on 16 May, aims to raise awareness about scams and alert consumers and businesses about how they can identify scams and avoid becoming a victim.
This year, the taskforce is asking everyone to ‘wise up to scams’ with a particular focus on scams targeting over 55s. In 2015, investment scams and dating and romance scams accounted for half the money lost by over 55’s.
Investment scams almost doubled in terms of the total amounts lost to just over $25.4 million. These scams pose a significant risk for Australians looking for investment opportunities, especially those looking to grow their retirement funds.
Dating and romance scams slipped to second in terms of reported loss but still accounted for almost $23 million in losses. These scams are successful because the scammer invests a great deal of time into building a trusting relationship which they ultimately use to defraud their victims
For more information on Fraud Week visit www.scamwatch.gov.au. You can also follow Scamwatch on Twitter or subscribe to Scamwatch Radars
Dr Michael Schaper is Deputy Chair of the Australian Competition and Consumer Commission.
