Australian fraud losses increasing as BEC scams surge

Australian businesses lost more than $7.2 million to email scammers last year and Australians are being hit harder by fraud than peers in many other countries, according to new figures that also flagged a 53 percent jump in business email compromise (BEC) last year.

Overall, Australians last year reported losing $107 million to Scamwatch, ACORN and other government agencies that monitor fraud, according to a new Australian Competition Consumer Commission (ACCC) report.

Investment scams fleeced Australians of some $38.8m, while dating and romance scams netted $24.6m, false billing took $5.5m, remote access scams – a major growth area last year – costed $4.8m, while hacking costed Australians some $3.3m.

Much of this reflects the ongoing background climate of scams, many facilitated by online delivery and immediate access to victims. But the $3.8m reported lost to BEC scams – likely just a fraction of the real cost – reflects a growing threat from the attacks, which target individuals within businesses and attempt to trick them into transferring money into fraudulent accounts.

“Scammers are hacking business email systems and impersonating the intended payment recipient,” ACCC deputy chair Mick Keogh said in announcing the new findings. “Depending on how long the scammers get away with this and how large the transfers are, this scam can be devastating to a business’s bottom line – to the extent of forcing small and medium businesses into closure.”

Small businesses with fewer than 20 staff were the most likely to be targeted, and accounted for over 75 percent of the reported BEC scams.

BEC has become a growing problem worldwide, with the US FBI recently reporting that US victims lost $US2.7 billion ($A3.8b) to online scammers and had lost $US12b ($A17b) to the fraudulent attacks since 2013.

The problem has gotten so bad that a UK publishing house is currently suing an employee who fell for a BEC scam that costed the company nearly £200,000 (A$369,000) across four payments.

Australia a target

The figures corroborate recent findings from Experian’s Identity Fraud Report APAC edition, which found that 60 percent of Australian businesses are seeing an increase in losses to fraud.

This was ahead of the APAC average of 50 percent of businesses, and also more than the global average of 55 percent of businesses.

More than two-thirds of companies in that survey expressed concern over fraud levels, although two-thirds of APAC businesses believe that their consumers are confident in their ability to protect those consumers’ data – and that the companies are using the most up to date security measures.

Despite this, Experian found, 22 percent of Australian respondents said they had encountered fraud at least once over the previous 12 months. A similar percentage said they would switch organisations after a fraud incident.