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Email scams hit Australian businesses more than 5800 times in 2018, with losses exceeding $7.2 million according to the Australian Competition and Consumer Commission ('ACCC').
The ACCC's Targeting Scams report details how sophisticated email scams hit Australian businesses at a 53 per cent increase compared to 2017.
This increase has been blamed on $3.8 million reportedly lost to sophisticated business email compromise scams. When combined with losses reported to the Australian Cybercrime Online Reporting Network, these scams cost Australian businesses over $60 million.
"Scammers are hacking business email systems and impersonating the intended payment recipient. The scammers request changes to bank account details so that the business makes the payment to the scammer instead of the legitimate business," says ACCC Deputy Chair Mick Keogh.
"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."
The ACCC says that any organisation or business that transfers money via bank accounts is a potential target for these scams. Scamwatch has even received reports of the hackers intercepting house deposits that have been sent to conveyancers, real estate agents or law firms.
The ACCC says that small businesses with less than 20 employees are the biggest targets for these email scams, accounting for more than 75 per cent of reports to the watchdog.
"Australian businesses must protect themselves by ensuring their staff are aware of these scams so they can identify and avoid them. Every business should have clear processes for transferring money and a procedure for verifying requests to change bank account details that uses multiple modes of communication," says Keogh.
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The Targeting Scams report also details how Australians lose nearly half a billion dollars to scammers in 2018.
The $489 million losses in 2018 to scammers is $149 million more than the cost of scams in 2017.
"And these record losses are likely just the tip of the iceberg. We know that not everyone who suffers a loss to a scammer reports it to a government agency," says ACCC deputy chair Delia Rickard.
READ MORE: Businesses urged to watch out for email invoicing scams
Investment scams were the most financially devastating scams at $86 million, an increase of more than 34 per cent compared with 2017.
Dating and romance scams also represent significant losses increasing from $42 million in 2017 to $60.5 million in 2018.
"These extraordinary losses show that scammers are causing significant financial and emotional harm to many Australians," says Rickard.
"Scammers are adapting old scams to new technology, seeking payment through unusual methods and automating scam calls to increase their reach to potential victims."
Of note was scammers impersonating government bodies like the Australian Tax Office ('ATO'), threatening arrest for unpaid taxes.
In November 2017, reports of the ATO scam increased more than 900 per cent.
"Scammers are using pressure and fear tactics combined with technology to trick people into parting with their money," says Rickard.
"Scammers increasingly ask for money via iTunes cards, Google Play cards and cryptocurrencies to avoid the anti-scam measures employed by banks and money laundering detection systems."
Despite the widespread paranoia surrounding the rise of sophisticated email and invoice scams, there are movements form our banks to attempt to put higher security measures in place.
According to Experian's 2019 Identity and Fraud Report (APAC) facial recognition and voice biometrics are gaining popularity as a means to prevent identity theft and fraudulent transactions.
Banks in Australia have embraced the roll-out of voice biometrics since 2016. Consumers here have benefited from having their identity verified while explaining their reason for calling.
"As consumers become used to operating their device with verbal commands, voice recognition can act as a natural extension", and offer greater security than, for example, fingerprint biometrics and remove the need for PINs, passwords or security questions," says Experian.
According to Experian a bank in Japan is equipping its ATMs with facial recognition technology by the end of 2019, allowing customers to open accounts.
The ACCC encourages people to visit www.scamwatch.gov.au to report scams.
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