By Claire Reilly
As part of a number of events being held across Australia for National Fraud Week, the Australian Competition and Consumer Commission (ACCC) and WA Small Business Development Corporation have joined forces to warn small businesses about the dangers of scams and the financial costs of falling victim to scamming behaviour.
With scams related to billing one of the biggest offenders, the information is of particular relevance to retailers who organise and manage their own accounts.
According to research released in 2012 as part of the ACCC’s Targeting Scams Report, false billing scams are the most reported of all business scams, and account for more than $560,000 worth of losses by small businesses.
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The deputy chair of the ACCC Michael Schaper said that small businesses often fell prey to scams because they had less time and resources to properly scrutinise any potential cons.
“Small financial losses to scammers can have a big impact on the viability of a small business,” he said.
“One trick popular with scammers is to send businesses a subscription form disguised as an outstanding invoice so they sign up for unwanted and continuing advertising services. They rely on business operators having lots of paperwork to process, with little time to check.
“Online shopping scams increased by 65 per cent in 2012, affecting both buyers and sellers and overpayment scams in particular are an easy trap for small business.”
Schaper said these scams were common on the sales of electronic items such as “smartphones, tablet devices and laptops”. In these cases, the scammer will ‘accidentally overpay’ for the item and then ask for a refund, hoping that the retailer transfers the money before realising the initial payment for product was phony.
“The seller will lose the money, as well as the item they were selling if they have already sent it on to the scammer,” said Schaper.
The ACCC outlined a number of tips for small business to avoid scams:
-Keep your filing and accounting systems well organised. This will make it easier for you to detect bogus accounts and invoices.
-Never provide personal information and banking details to anybody you don’t know and trust.
-Make sure the business billing you is the one you normally deal with and ask for the name of the person you are speaking to and who they represent.
-Never give out any information about your business unless you know what that information will be used for.
-Do not agree to offers or deals straightaway. Always ask for an offer in writing and consider getting independent advice if the deal involves money, time or a long-term commitment.
-Ensure that you have clear procedures for verifying, paying and managing accounts and invoices.
-Install reputable computer protection software and a firewall and keep them up to date.
-If you become aware of a scam, let other people and your industry association know about it.