ACCC warns SMEs as false billing scams jump by 60%

Small- and medium-businesses should be on the lookout for false billing scams after the number of these frauds rose during 2009 by nearly 60%, the deputy chairman of the Australian Competition and Consumer Commission has warned.

The comments come as the regulator’s recent Targeting Scams report shows the number of banking and online schemes also increased during the past 12 months.

The report shows false billing scams accounted for 6.8% of all scams reported to the ACCC, and have affected businesses the most.

“Scammers continued to target small businesses in an attempt to trick them into paying for a listing or advertisement in a magazine, journal or business register/directory,” the report states.

“A common example is where a small business is sent a subscription form disguised as an outstanding invoice. This is an attempt to trick the recipient into signing up for unwanted advertising services.”

Additionally, the report also reveals a 100% increase in the number of online shopping scams during 2009, with more than 54% of all online scam reports concerned with mass marketed advance fee fraud, which includes up-front payments, dating and romance, lottery and unexpected prize scams.

ACCC deputy Michael Schaper said smaller businesses in particular are more likely to fall victim to scams due to the limited staff and time available.

“Scams have always been a bit of a problem for SMEs because they find it hard to differentiate when a scam comes in and when an invoice is an actual bill that needs to be paid. One of the scams we’ve found is an invoice registration fee which looks real, but actually changes slightly to a “.net” or something. That could slip through quite easily.”

“Scams are increasing in number, increasing in variety and really the ways in which businesses can get caught in them are increasing. By that I mean once there was just phone and a fax, but now there is the internet and more interaction opportunities.”

Schaper says businesses and business owners must be educated in how to avoid and detect scams, and should be quick to report any attempts to authorities.

“Businesses need to be more professional in their record keeping and accounts, because there are still lots of people who are operating in the equivalent of a shoebox. There are really simple ways to keep up-to-date on this stuff. Additionally, make sure just one or two people are in charge of paying accounts.”

“Also, when you come across a billing or mail scam, just take the time and think. Many scammers think these things will work on the basis of a snap decision, but run it past those who run the books and the 2IC. If a scam is too good to be true, then it usually is.”