A new report from the ACCC shows payment redirection scamming activity is an increasing threat to Australia’s businesses and NFPs. The increased scamming activity highlights the benefits of accounting strategies segregating duties and adding controls that reduce risks.
The 2022 Targeting Scams Report was produced by the Australian Competition and Consumer Commission (ACCC) based on data from Scamwatch, ReportCyber, major banks and money remitters, and other government agencies.
It follows the June report from Scamwatch that indicates an increase in scamming in Australia by 166 per cent compared to the same period last year.
Businesses and NFPs need to be aware of the types of scams that increase their vulnerability and work to implement strategies to reduce their risk.
The scammer activities breaking through defences
The ‘top five’ in the types of scams reported last year, according to the Scamwatch data, were: False billing (losses of $6.7 million); Investment (losses of $6.7 million); Classified (losses of $6.7 million); Online shopping (losses of $6.7 million); and Identity theft (losses of $6.7 million).
False billing scams, which include payment redirection scams, represent the most reported losses. The ACCC reports, “In a payment redirection scam, also known as business email compromise scams, scammers impersonate a business or its employees via email and request that money, which usually is owed to the legitimate business, is sent to a fraudulent account”.
Smaller organisations hard hit by scammers
ACCC data on scam targets shows that risk reduction is essential to businesses of all sizes, primarily smaller entities. Scamwatch data indicates that small and micro businesses in Australia lost the most money to scams in 2021.
Scammers may be more likely to target smaller businesses as they don’t have the same security measures as large corporations.
Many smaller businesses find it harder to ensure the best standard practices. To deter business fraud, for example, the best practice is to avoid having a single employee who authorises, keeps records and has custody of assets. To avoid fake invoices, you need review systems in place and staff training on identifying scam activities.
How Next Dimension Accounting can help you with fraud mitigation
As an experienced accounting firm, Next Dimension encourages businesses and NFPs to review their strategies to reduce the risks posed by these kinds of scams. For example, our outsourced Accounts Payable teams work with our clients to introduce Technology and update internal procedures so that relevant staff are alerted to suspicious offers and reduce opportunities for scamming.
Having an outsourced accounts team on board will ensure that a team of trained accounting professionals will:
- Ensure segregation of duties to decrease the risk of a person having the ability to commit fraud
- Implement technology that promotes efficiency, and reduces and detects fraud.
- Impart expert advice on detecting and avoiding scams.
- Have a detailed budget to measure actual results against so that unusual expenditure can be reviewed
- Free up the CEO to deal with other parts of the business.
For more information, contact the Next Dimension team.
