Be warned: scammers continue to target small business

Small businesses are being warned to be on the lookout for scams that can affect their livelihoods.

Regardless of size, age, location or sector, small businesses continue to be targeted – more than 90,000 Australians reported scams to the Australian Consumer and Competition Commission (ACCC) last year, according to its Targeting scams report.

The most common is false billing, a type of scam that includes advertising, directories and domain names.

In 2013, more than 3,600 reports about the scam were received – an increase of 45 per cent on the previous year – with almost $725,000 being lost.

The scam targets small businesses by tricking them into paying for unwanted or unauthorised listings or advertisements in magazines, journals, business registers or directories.

Small Business Commissioner David Eaton said common tactics are to send a business a subscription form disguised as an outstanding invoice.

"This way the scammers get the business to sign up for unwanted ongoing advertising services," he said. "They also falsely claim the directory or publication is well-known or has a high readership.

"Another common false billing scam involves sending invoices for domain name renewals.

"Scammers send businesses an invoice to renew their current domain name registration but the name will be slightly different with just a ‘dot-com’ instead of ‘dot-com-au’ in the web address.

"Other scams include office supplies, overpayments and investment schemes."

The ACCC offers the following advice to protect small businesses from scammers:

  • Ensure clear procedures are in place for verifying, paying and managing accounts and invoices. Limit the number of people authorised to place orders or pay invoices.
  • Make sure the business billing you is the one normally dealt with – check whether details on invoices received are the same as usual or whether some are subtly different.
  • Never provide personal information and banking details to anybody you don’t know and trust.
  • Don’t let anyone pressure you into making decisions involving payments or ongoing contracts. If you are unsure, always seek independent financial or legal advice.
  • Install reputable computer protection software and a firewall – and keep them up-to-date.

Mr Eaton said busy small business operators can be easy targets for scammers if they don’t have effective systems or processes in place.

"It’s important all businesses ensure their staff have the knowledge they need to follow established purchasing and payment processes, and to recognise when something isn’t right," he said.

"The importance of a sound cashflow system cannot be underestimated – if businesses kept a clear, reliable system that documents credits, debits and the details of all outstanding invoices, then life would be much harder for scammers."

To help small businesses protect themselves from scams, the ACCC has launched a new fact sheet

Small businesses can also access the Department of Commerce's WA ScamNet which gives information on the most prevalent scams and how to recognise them.