Four in Five Australian Small Business Owners Targeted by Scams in Past Year, Banking Bodies Warn

By Kekeletso Nkele, small.news Assistant

(small.news) — Four in five small and medium enterprises in Australia reported exposure to a scam attempt in the past year, according to new research commissioned by the Australian Banking Association and released ahead of Scams Awareness Week from August 25 to 29, reports MPA.

The ABA and the Customer Owned Banking Association are using the week to call on small business owners to strengthen fraud prevention practices, while highlighting investments the banking sector has made in detection technology, data sharing, and community education.

Three Scam Types Posing Greatest Risk to Small Business Owners

The ABA identified three fraud methods as particularly common among small operators:

– Fake invoice scams involve criminals substituting fraudulent payment details for those of a legitimate supplier, redirecting funds to criminal accounts.
– Remote access scams involve fraudsters posing as technical support representatives or financial institutions to access business systems and banking credentials.
– Business impersonation scams involve criminals posing as a known company or government body to extract payments or sensitive information, causing both financial and reputational damage.

Simon Birmingham, chief executive of the Australian Banking Association, said small businesses are prime targets for scammers because criminals look to exploit vulnerabilities in everyday business systems and processes. He noted that a single fraudulent invoice processed on a busy afternoon could wipe out a week’s earnings, with smaller operators bearing the greatest impact.

Birmingham said 30% of businesses reported their bank flagged a suspicious transaction in the past year, while one in five said their bank blocked a transaction entirely. He called on every small business owner to verify a supplier’s bank account details by calling the supplier directly at a known, trusted number before processing any payment. He said this step could stop a scam and save thousands of dollars.

The ABA is also rolling out Confirmation of Payee, a system designed to verify that account names match payment details before a transfer is processed, as part of a broader industry-wide effort to reduce fraudulent misdirection of payments.

Customer-Owned Banks Highlight Local Detection Advantage

The Customer Owned Banking Association said all of its member institutions became signatories to the banking industry’s Scam-Safe Accord in November 2023 and have since continued to build out anti-scam capabilities, including data-sharing arrangements and detection technologies.

Michael Lawrence, chief executive of COBA, said scams have a devastating impact on the individuals and communities its members serve, with losses that can ripple through towns and affect local businesses, families, community investment, and employment.

Lawrence said customer-owned banks are often well placed to detect unusual behavior early because of their close relationships with customers and communities, and that member institutions have a long-standing commitment to meeting customers in person to build practical fraud-awareness skills.

Free Community Sessions Running Across Regional New South Wales

Several COBA member institutions are hosting free community education sessions during the week. The Mutual Bank in Maitland, NSW, is holding a morning forum on August 26 at Easts Leisure and Golf Club in East Maitland. Hume Bank in Albury is running an evening session for residents and business owners on August 27 at its Olive Street branch, starting at 5:30 p.m. Bank Orange will hold its annual community safety forum on September 7 at the Orange Ex-Services Club from 5:30 p.m.

Official Guidance: Stop, Check, Protect

The National Anti-Scam Center advises small business owners and individuals to follow three steps when confronted with a suspicious request: stop and withhold money or personal information when in doubt; check whether a message or payment request could be fraudulent; and protect yourself by promptly reporting suspected scams to Scamwatch.