How to avoid falling victim to payment redirection scams

Published: 08/06/2021

How to avoid falling victim to payment redirection scams

While technology has given Australian businesses a world of opportunity, it has also left many exposed to a multitude of scams targeting them. The risks are out there, and falling victim to a scam could come down to a single misjudgment.

A regular day-to-day operation for most businesses, paying bills and invoices, has become a source of anguish for many.

Last year, payment redirection scams cost local businesses $14 million. Average losses for the year to date are trending more than five times higher, according to the Australian Competition and Consumer Commission.

The confronting reality is that this figure is in fact much higher, as the commission has only taken into account incidents reported to their Scamwatch service.

Some scammers pose as a business or one of its employees and then reach out to customers chasing up legitimately owed money. They inform the recipient that the business' bank details have been updated. But when funds are sent, they are redirected to the scammer's fraudulent account.

Also known as "business email compromise incidents", these scams affect many types of businesses, large and small.

In other instances, the scammers target a business' employees, by posing as a staff member that wants their salary paid into a different account. They may also impersonate a company president or treasurer, requesting staff pay invoices for equipment or other business needs. This is often done using a registered email address that imitates the genuine one.

Scammers will commonly target new or junior employees, or even volunteers. An increasing number of sport and community clubs are losing money to scams each year, with $55,000 lost during last year alone.

After falling victim to a payment redirection scam, when it comes to recovering any money lost, the odds are stacked against you. That's why it's important to ensure any preventative measures that can be taken, are taken.

Brokers are generally associated with helping businesses ensure their cover needs are being met, but they can also help you manage and reduce the threat posed by scammers.

While cover gives you peace of mind, it's always recommended you also take suitable measures to lower any risks.

Even when you're taking sufficient precautions, the risk of scammers is ever-present, and it's worth considering how your insurance options could keep your business protected. Speak with your broker for more information on the types of cover that could be best suited to you and your business.

How Coverforce can help

Our experienced insurance brokers will take the time to assess your business' individual cyber risk management requirements and exposures and deliver a comprehensive insurance solution that is tailored to your specific business needs.

For more information or to arrange cover, please contact your local Coverforce office.

The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.

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