The Australian Competition and Consumer Commission (ACCC) and WA Small Business Development Corporation held a joint event in Perth today to educate business owners about scams.
The event was part of National Consumer Fraud Week 2013.
Curtin University of Technology lecturer Doctor Paull Weber presented his online scams research which showed that small business could spend up to 100 hours dealing with the consequences of a scam.
According to Weber’s research, 70 per cent of the 291 small business survey participants wasted time or money thwarting a scam attempt and 12 per cent suffered financial losses.
ACCC deputy chair Doctor Michael Schaper said small business operators can be easy targets for scammers as they have fewer resources and are often pressed for time.
According to the ACCC’s<i>Targeting Scams</i>report, false billing scams affected a number of small business owners in 2012 with more than 2500 complaints and $560,000 lost.
“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,” Schaper said in a statement. “They rely on business operators having lots of paperwork to process, with little time to check.”
Overpayment scams were also affecting small business operators. These scams work when a scammer responds to a seller’s ad with an offer and then 'accidentally' overpays.
He said that the scammer will ask the seller to refund the excess amount by money transfer in hope that the seller will transfer the money before they discover that the cheque has bounced or that the money order was fake.
“The seller will lose the money, as well as the item they were selling if they have already sent it on to the scammer,” he said. “Common products that scammers target include used cars or boats, and electronic items such as smart phones, tablet devices and laptops.”
The ACCC also provided some tips for small business owners:
- 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 security software and a firewall. Keep this protection up to date.
- If you become aware of a scam, let other people and your industry association know about it.
Follow Hamish Barwick on Twitter: @HamishBarwick