Australia’s banking industry has pledged its commitment to support small businesses to combat financial scams.
The support comes in the form of a $100 million upgrade across the banking sector that will identify whose money is being paid to by matching names with account numbers.
It is envisioned that this upgrade will be of particular benefit to small businesses who often fall victim to invoice substitution scams.
Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has welcomed this move by the banks.
“Nefarious cybercriminals can wreak havoc for a small business but sadly the number of scams and the size of the losses for small and family businesses is growing,” Billson said. “When a criminal impersonates your business, it not only costs you and your customers money but can damage your brand and lead to a loss of consumer trust and confidence and the ability to operate. Too often, it can be an enterprise-ending event for a small business.”
Scamwatch has recently revealed that small businesses lost $13.7 million to scams last year, a 95 per cent increase compared to the previous year. The biggest contributor to these losses was payment redirection scams wherein an invoice is sent to the victim’s inbox which not only looks legit but is also a bill the small business was expecting so it pays it. The money goes to the criminal’s bank account and is quickly shifted, usually to cryptocurrency, and is gone.
“ASBFEO has been highlighting the urgent need for a ‘confirmation of payee’ scheme to be introduced in Australia, noting similar programs operate in other countries offering a really practical safeguard,” Billson said. “This ensures people can confirm they are transferring money to the person intended and that names are matched to BSB and account numbers.
“(The) pledge by the banking industry to roll out a new confirmation of payee system will go a long way to stopping scammers being able to divert invoice payments by simply and silently changing a bank account number,” Billson added.
It is noted that the measures announced by the Australian Banking Association and the Customer Owned Banking Association will apply to commercial banks, customer-owned banks, mutual banks, building societies and credit unions. It will also include more use of biometric checks and other controls to prevent scammers opening fraudulent bank accounts in other people’s names by using stolen information from driver’s licences, passports and other identity documents.
There will also be increased warnings and payment delays for suspicious transactions, limits on high-risk payment channels, which can include crypto platforms, and greater intelligence sharing across the banking sector using the Australian Financial Crimes Exchange.
Billson, however, issued a reminder that beating the scammers will depend on everyone being at their best by doing what they can to tackle the scourge of cybercrime and to “listen to our Spidey senses if something doesn’t seem right”.
“Business owners wouldn’t leave the door open with the light on at night when there’s no one there, so they must take the right steps and safeguards in the digital world,” he said. “Telecommunication companies are trying to do their bit via what’s called a ‘clean pipes’ initiative, where they cut off a lot of cyber threat traffic through the telecommunications infrastructure.
Prior to this, the Australian Government recently announced two programs offering small businesses practical help to minimise the chance of falling victim to cyber attacks and to better prepare them to bounce back.
Billson also said that the coming Scam Awareness Week is an ideal time for small business owners to take a few extra moments to check they have appropriate safeguards in place.
“Scamwatch says three in every four scam reports involve criminals pretending to be people we should trust,” Billson warned.
