Small business alert: more than $2.3 million lost to scams so far in 2018

There are only four months left of 2018, and already Australian small businesses have lost more than $2.3 million to scams. And most of these scams were conducted through email.

This data was revealed in the Small Business in Focus report, published by the Australian Competition and Consumer Commission (ACCC) on 28 August.

A previous report by the ACCC, Targeting Scams, revealed that in 2017 some 5,500 scam reports were received from businesses, resulting in a total loss of $4.7 million.

According to this report, businesses were most commonly targeted by false billing scams. Of more than 160,000 scams reported to the ACCC in 2017, 26,386 were for phishing.

Why small business is a target for hackers

Here at Retrac, we’re very aware that the media focus on major security breaches involving large organisations can give the impression that only big business is a target for cybercrime.

In recent blogs, we’ve explained why small business is also a target for hackers and we’ve talked about some of the successful cyberattacks we’ve heard about. One was where an attacker identified a weak password in a small business and spent a month monitoring that employee’s email account. The hacker then wrote a convincing email to a customer asking for a bill to be paid directly into their own bank account.

As leaders in this industry we want to echo the warning to small business given by ACCC deputy chair Mick Keogh when the figures were released:

“Small businesses continue to lose money to sophisticated scams. Businesses need to be very careful about business email scams where scammers pretend to be a supplier of small business, or even someone within the business, like the CEO or CFO, and intercept payments by emailing new payment systems.”

And, as we’ve written about before, there are other reasons why small businesses are vulnerable to cyberattack. One reason is that successfully accessing a small business’s data can give the hacker a ‘back door’ into a larger organisation’s system. Another is that small business owners are more likely to pay ransoms and they lack the needed cyber-defences today’s modern world demands.

Sharp increase in security spending

With so much at stake as hackers grow increasingly sophisticated, it’s not surprising that security spending in Australia is likely to reach $3.9 billion for 2019, according to data from research firm Gartner. This is a growth of 9.8 percent on previous figures.

Their forecast also reveals that worldwide spending on information security products and services is predicted to reach more than $US114 billion in 2018.

Gartner found that security risks, business needs and industry changes, along with privacy issues, were significant factors for the increase in security spending.

It is vital that small businesses take heed of the risks and don’t become complacent, because they believe they have good IT security in place. The hackers’ tools are constantly evolving and becoming more sophisticated, so a businesses’ data security must always be evolving too.

Working with a partner can help small businesses stay across this ever-evolving landscape. The first important step is to be aware that you could be a target and that you need to take action.

Unsure how your security stacks up? Take our security challenge today.

If you have questions or need help in implementing the security you need to avoid becoming another scam statistic, get in touch with one of our team.

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