We heard a sad story over the weekend about a lovely online homewares business who have been the victims of a sophisticated scam which has seen them lose a substantial amount of money.
We all know we need to be savvy these days about viruses and software bugs or spam, however we are seeing a rise in ‘phishing’ scams, where software is used to watch and then copy the actions of people online. This is called CEO fraud, and it’s more insidious than software viruses because it’s more ‘human’.
The business we heard about is very careful – they have anti-virus software and are aware of the dangers of online scams. They had worked with a trustworthy supplier for years, and at some point months earlier their emails were intercepted by hackers who took over all communication and blocked any real communication. The email address, email signature and entire writing style was the same. They knew the history of their business dealings. They sent an email saying the goods were ‘ready’ and they requested the invoice amount be paid to a different account than usual, which is not uncommon amongst suppliers. The business requested supporting documentation, which was readily provided, and then paid the invoice. That money – a substantial amount for a small business – has now disappeared. The business owners are devastated and feel naïve, although the situation was in no way their fault.
It’s a timely reminder to be very aware of your internal processes and procedures. Have good password protocols. Question any changes to supplier business details or bank accounts. It’s also important to regularly install software updates when they come out as this will help protect you against malware. Talk to your team regularly about scams, being safe online and what to watch out for! It could also be worth considering scam insurance through your business insurance provider. As these scams become more and more sophisticated, we need to be vigilant and protect ourselves and our businesses. Please talk to your accountant if you need any advice about ways to protect your business – we have an IT expert who we work with who may be able to assist you.
The ACCC have just released their ‘little black book of scams’ to help people avoid the traps and pitfalls. You can download a copy of this here.