Migrant small businesses are being targeted by con artists with a "sophisticated" in-language scam, the consumer watchdog says.
Migrant small business owners must be vigilant amid a spike in targeted in-language scams attempt, the consumer watchdog has warned.
The Australian Competition and Consumer Commission (ACCC) told SBS News there has been an increase in “sophisticated” in-language scams that lure business owners into making fraudulent payments.
In 2017, Australian businesses lost almost $5 million to scams, marking an increase of 23 per cent on the previous year, the ACCC said.
More than 5000 businesses reported scams to the ACCC and, on average, business owners lost $11,000 to scammers. For some, that meant the end of their small business.
“Most small businesses are trading on very small profit margins to begin with, so being scammed can be really devastating,” ACCC Deputy Chair Michael Schaper told SBS News.
“Unfortunately, scammers are constantly active and we do know small businesses are one of their priorities.”
The ACCC data revealed businesses with fewer than 20 staff accounted for more than half of all businesses scammed.
Dr Schaper said entrepreneurs must be aware of the recent spate of scams targeting migrant communities in Australia.
“Scammers targeting small businesses amongst migrant communities will often use tools that are in someone’s particular language, and that automatically makes them more likely to listen to the scammer… they build that credibility by using someone’s first language,” he said.
“We’ve also seen scams involving demands for payment, pretending to be from government authorities, and these scams are more likely to be recognised as legitimate by people who come from countries where government systems are opaque … it’s not how government operates here, but if you’re settling into the country, those things aren’t always as obvious.”
Dr Schaper said scams have become so sophisticated that in some instances, victims never even realise they have been conned.
“Business owners are so busy running their business; they rarely have time to check all the bills or requests for payments which come in, and it’s very easy for a scam to slip through,” he said.
“Small businesses, compared to bigger firms, tend not to have particularly sophisticated defences against scammers, and they are more vulnerable for that reason.”
According to the recent figures, businesses were most likely to be targeted with false billing scams, which are when con artists create realistic looking invoices or false investment opportunities.
“In many cases, the scammer is operating outside Australia - so, we do put a strong emphasis on prevention because it’s often impossible to get the money back,” Dr Schaper said.
“With faster money transfers, unfortunately, it makes that when scams do take place, the window of opportunity to reverse the payment is narrowing.”
There are a variety of increasingly sophisticated and creative scams popping up every year, and according to Dr Schaper, identity theft is a major problem for small business owners.
“We’ve seen what’s called the CEO impersonation or business intercept scam, where a hacker gets a small amount of information to build a detailed profile, which they use to tell other people in the business where to make payments, or intercept emails, and redirect funds to themselves,” he said.
“There’s also an undercurrent of award scams – they know people like to have a slogan or award, but these fake award scams are an outright sham, and ultimately, can reflect poorly on the business.”
While many business owners have enjoyed the benefits of technological developments, Dr Schaper said people need to be extra cautious in the digital age.
“Today we have a whole diversity of people working in small businesses, self-employment, and more, so it’s very hard to work out where a transaction lies. That doesn’t mean don’t engage with the gig economy, you just have to think twice,” he said.
“If you see something that doesn’t feel right, sometimes your gut reaction is just as powerful as any sophisticated detection tool, so think twice before you pay.”