Scams cost Australian small businesses AUD $7.9 million

Scams targeting Australian micro and small businesses have continued to cause substantial financial harm despite a reduction in total losses from 2023 to 2024.

In 2024, small businesses across Australia experienced losses amounting to AUD $7.9 million due to scams. This figure, although significantly reduced from the AUD $17.3 million loss in the previous year, remains a significant burden for the business sector. This decrease has been attributed to efforts by the National Anti-Scam Centre. However, scam incidents continue to place small businesses at considerable risk.

Data analysis by Australian accounting software company Reckon has shed light on the nature of these scams and their impact on micro and small businesses. Reports from these businesses represent about half of all reported scams, with almost 60% of the losses in 2022 and 2023 attributed to this demographic.

Oliver Gye, Content Writer at Reckon, noted the financial strain scams impose on businesses: "Our analysis highlights the significant financial loss caused by business scams on micro and small businesses. To prevent falling victim to one of these common business scams, small business owners should stay up to date on the latest scam tactics and maintain education on phishing and cybercrime. Micro and small businesses often lack resources to allocate to cybersafety and protection, so remaining educated is key to staying one step ahead of scammers."

The analysis identifies false billing as the most frequently reported type of scam, with 422 reports and a combined loss exceeding AUD $3.6 million. Despite the lower frequency of investment scam reports, these accounted for the highest losses per incidence, with an estimated total of over AUD $3.7 million from just 50 reports.

Reckon found phishing scams to be the second most common, with 336 reported incidents costing over AUD $104,000 in total. This makes it the fourth highest in terms of financial loss among the various scam categories.

Queensland emerged as the state with the highest losses from these scams, totalling AUD $2,502,386 from 411 reports, with Victoria following closely at AUD $2,326,890. Notably, Victoria had the highest average loss per report at AUD $6,222, though the state recorded the lowest rate of reports per 10,000 businesses.

Conversely, Tasmania reported the lowest total financial losses from business scams, a total of just AUD $3,123, although it registered the highest rate of reports relative to the number of businesses. False billing and online shopping scams were the only scam types causing financial loss in Tasmania.

The Northern Territory recorded the lowest number of micro and small business scam reports but still had the second-highest rate of reported scams per 10,000 businesses.

Gye elaborated on preventative strategies: "Strengthening cybersecurity measures through two-factor authentication and using passphrases instead of passwords is also essential in protecting your business from scammers. Small businesses are often targeted through emails, making it vital for small business owners to look out for common signs that may indicate an email is a scam. This includes suspicious addresses, poor grammar, high-pressure tactics and attempts at mimicking a legitimate email."

To protect themselves, small business owners are advised to stay informed through resources like Scamwatch, implement robust cybersecurity measures such as two-factor authentication, and ensure regular data backups. Vigilance and sharing information about scam encounters can also help safeguard other businesses from similar threats.