Protect your small business from scams

Scams cost small businesses in Australia millions of dollars each year. Do you know what to look out for in order to protect your small business from scams?

While scams are designed to look completely legitimate, some that have appeared lately can throw you off guard if you’re not paying attention.

And it’s growing!

2,652 Australian businesses reported in 2014 they had lost $509, 000 dollars to false billing type scams alone. In 2015, this grew to 4,103 businesses reporting they had lost $616,000 and based on data collected so far for 2016, these figures are expected to grow to over 8,000 business reporting losses of false billing scams to the tune of $800,000. Figures courtesy of ScamWatch.

Now some might say that’s not a lot of money, however consider the number of businesses that aren’t reporting because they’re too ashamed to admit they’ve been scammed!

Here are a few of the more notable scams doing the rounds;


The invoice / false billing scam

Have you ever received an invoice, either my mail or email, for something you can’t recollect purchasing or ordering?

This scam is more often successful with larger businesses where there are a number of employees and it’s harder to keep track of who ordered what and when.

A few variants of this scam are;

You receive an invoice for something you order on a regular basis from a supplier you do not recognise, or they note on the invoice that the supplier has changed their name.

Another variant comes in the form of a scammer attempting to mirror your current supplier for goods and services for which you would regularly purchase. They might send you an invoice that claims to be from your regular supplier with a note saying their banking details have changed.

You may also receive an invoice from a new supplier for goods or services you or an employee did not order.

In some cases, the scammer will attempt to chase up after the due date listed on the invoice and may even threaten debt recovery proceedings.


Advertising scams

There are two variants of the Advertising scam;

Similar to the invoice scam, these generally come in the form of invoices or requests to pay for advertising did you did not request and possibly for an advertising publication that doesn’t even exist.

The second variant plays on a legitimate advertisement you publish, and attempts to fraudulently invoice for you using an invoice made to look like one from the legitimate advertiser, while providing fraudulent payment or banking details so you end up paying the invoiced amount to the scammer and not the genuine advertising company. These are often harder to detect as scams, however you should always be diligent when approving or paying invoices.

These Advertising scams can also mask hidden costs, or an ongoing commitment and like the invoice scam above, may follow-up and threaten a business with debit recovery proceedings.


Domain name renewal scams

Have you ever received a domain name renewal notice by mail or email, however not from the company you have your domain currently registered with?

The domain renewal scam often involves an email offering to renew your domain and while all of your details will be correct on the invoice, it may well be from a company you’ve never heard of, or a company appearing to ‘manage’.

Unfortunately the domain name system allows almost anyone to look up your domain registration details including your name, business name, ABN and email address. With a little more effort, a scammer can use some of these details to look up your business address, giving them everything they need to send you what looks like a legitimate invoice.

Often scammers will send out a renewal notice well before the renewal is due, in order to get ahead of the renewal notices from the company that actually provides you with your domain name

When in doubt, always check with the company your domain name is currently registered through. Losing a domain name doesn’t just mean losing your website, but could also mean losing your email – given how critical they both are in today’s world, it’s always worth a quick call to your current domain name provider to confirm if the invoice is legitimate.


The tax scam

While this has been more widely reported among consumers and not so much small businesses, there have been reports of people calling small businesses who claim they are from the Australian Taxation Office (ATO) ‘reminding’ you of an outstanding tax debt, and you’ll go to jail if you don’t pay immediately. These scams have also appeared as emails.

In short, Government agencies like the ATO don’t conduct themselves like this and any request to ‘pay immediately or go to jail’ should be ignored and reported. If you’re unsure and wan tto protect your small business from scams, hang up and call the ATO.



This scam one has become a reasonably large issue lately.

The tell-tale signs of this scam generally start by receiving an email with an attachment, either a Word Document, Zip file or similar file that can carry malicious software.

The unsuspecting recipient of the email, upon opening the attachment unleashes the malicious software on their computer which could be used in a number of ways, including;

  • Lock all of your files, or your computer in a way they can’t be used
  • Extract sensitive information from your computer and send on the to the scammer

Once infected, the term ‘ransonware’ comes into effect. You’ll often see messages along the lines of ‘pay a ransom or you won’t ever be able to access your files/computer again’ or claim to use the sensitive details extracted to cause havoc depending on what information it was able to extract.

In short, never pay the ransom money. But more importantly, don’t ever open a file attached to an email that you don’t trust.

If you’ve been sent an email with an attachment from a source that looks legitimate, but weren’t expecting, confirm the email’s legitimacy with the sender before opening.

You should always back-up your files and back up regularly to protect your small business from scams. There are a number of reasons why you might need backups, but this is one that could cripple a small business very quickly.

Don’t have your files backed up? We recommend you get that sorted quickly taking a look at our Online Backup options.


What can you do to protect your small business from scams?

  • Be on your guard at all times; if an invoice looks suspicious then investigate it.
  • Educate your employees on scams
  • Limit the number of employees who can order goods and services, and pay invoices.
  • Put processes in place within the business to check each invoice with the person who ordered the goods/services.
  • Don’t just throw away old invoices, consignment notices or anything that would detail items you’ve purchased in the past. If you have to dispose of these, shred them!


Is it worth dobbing in scammers?

Most times, it’s going to be difficult to trace where and who the scam originated from, however if you come across a fraudulent invoice with banking details, it’s worth speaking to the police or your state Consumer Affairs office to report it. While most people think the scammers get away red-handed, some don’t as in this case in New South Wales, so its always worth reporting scams and encourage others to do the same, which helps protect your small business from scams in the future.


More information

This is just an overview of how to protect your small business from scams. More great information can be found at ScamWatch. Don’t forget to head over and check out our online backup options, in case you ever do get caught up in a scam (we hope you’ll never need it, but it’s good insurance!)

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