BEC scams on the rise: Scamwatch

Reports of business email compromise (BEC) to Scamwatch have grown by one-third this year.

As a consequence, Scamwatch is calling on businesses to urgently review how they verify and pay accounts and invoices.

“This is a very sophisticated scam, which is why many businesses only realise they’ve been caught out once it’s too late,” ACCC Deputy Chair Delia Rickard said.

BEC scams occur when a hacker gains access to a business’s email accounts, or ‘spoof’ a business’s email so their emails appear to come from the company. The hacker then sends emails to customers claiming that the business’s banking details have changed and that future invoices should be paid to a new account. These emails look legitimate as they come from one of a business’s official email accounts. Payments then start to flow into the hacker’s account.

In other variations of the scam, the hacker will send an email internally to a business’s accounts team, pretending to be the CEO, asking for funds to be urgently transferred to an offshore account. Hackers can also request salary or rental payments be directed to a new account.

Scamwatch has even received reports of the hackers intercepting house deposits that have been sent to conveyancers, real estate agents or law firms.

“It’s a scam that targets all kinds of businesses, including charities and local sporting clubs. There is a misconception these scams target just small business; however, the largest amount of reports and losses came from medium-sized businesses, including one that lost more than $300,000,” Rickard said.

Businesses have reported losses to these scams totalling $2.8 million to Scamwatch in 2018. However, this represents only a fraction of total losses to this variety of scam across Australia. BEC scams cause businesses significant financial harm, accounting for 63% of all business losses reported to Scamwatch. The average loss is nearly $30,000.

“Effective management procedures can go a long way towards preventing scams, so all businesses should firstly be aware these scams exist and that their staff know about them too,” Rickard said.

“They should consider a multiperson approval process for transactions over a certain dollar threshold and keep their IT security up to date with antivirus and anti-spyware software and a good firewall.”

“Businesses should also check directly with their supplier if they notice a change in account details. It’s vital businesses don’t do this just by return email or using other contact details provided. Find older communications to ensure you have the right contact details or otherwise independently source them, so they can be sure they’re not contacting the scammer,” Rickard said.

Businesses affected by BEC scams should contact their financial institution immediately and consider professional IT advice to ensure their email systems and data are secure from hackers.

Businesses can report scams to www.scamwatch.gov.au and subscribe to Scamwatch on Twitter and Scamwatch radar alerts to keep up to date with the latest scams affecting the business community.

Image credit: ©stock.adobe.com/au/Glebstock

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