Micro firms warned of end-of-financial-year scams

Entrepreneurs are being urged to keep their guards up to avoid invoice and billing scams, as fraudsters use the end of the financial year to target unsuspecting small firms.


Michael Schaper, deputy chair of the Australian Competition and Consumer Commission, says with so many people organising their financial affairs, scammers see this time of year as a prime time to target businesses.


Schaper warns it is SMEs, particularly micro-businesses, which fall prey to these scams as they often don’t have the time or money to properly vet them.


“Scams potentially affect every business but for micros they may not have sophisticated account-keeping systems,” he says.


According to the ACCC, the most common scam reported by small businesses is false billing, which involves false invoices for advertising, directory listings, domain names and office supplies. In 2010, false billing resulted in a total reported loss to the ACCC of $966,844.


Schaper says small business owners need to keep their guards up to avoid invoice and billing scams, identifying the main methods scammers use as:

  • Sending invoices for payment of goods or services which the business did not request, such as unordered business supplies.
  • Charging for advertising which the business did not request.
  • Providing fake directory listings.

“These types of scams aim to trick your business into agreeing to ongoing payments for goods or services you didn’t order,” Schaper says.


The ACCC says scams that involve advertising and online directories often cause the biggest headaches.


“If your business receives an invoice for advertising in a telephone directory, trade journal or online directory, SCAMwatch urges you to check it carefully before you provide any details or make any payments,” it says.


“Are you really only being asked to update your details? Is the service really free? Do you want to pay to advertise in that directory? It’s not uncommon for scammers to use a name or logo similar to a genuine and reputable directory, so don’t be fooled.”


The ACCC has some simple tips to help small businesses avoid scams:

  • Know your suppliers. Keep written records of all orders and purchases, and only deal with suppliers you know and trust.
  • Check the legitimacy of any offer by contacting the organisation using its official contact details. Don’t rely on the details provided to you on the invoice or offer, as it is very common for scammers to pretend they are affiliated with a reputable business.
  • Educate staff about scams and instruct them to be cautious when examining all accounts or offers.

In addition to educating staff, the ACCC says businesses should limit who has authority to order or buy anything.


“Remember that government agencies, banks and financial institutions will never send emails requesting verification of personal details for any reason, including tax returns,” it says.


Last week, security software firm AVG issued a warning to businesses ahead of the tax return season, which commenced on July 1.


AVG says taxpayers tend to fall prey to fraudulent emails, texts and phone calls purporting to be from the Australian Taxation Office at this time of year.


“In upcoming months, when the prospect of tax refunds is on everyone’s mind, be alert to emails and phone calls about money owed to you by the ATO or the need to recalculate your tax,” AVG security evangelist Lloyd Borrett says


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