Australian consumers and businesses lost close to $82 million from scams in 2014, with the Australian Competition and Consumer Commission receiving reports of almost 92,000 scam incidents during the 12 month-period.
But the ACCC’s Targeting scams report published today shows the total financial losses recorded as a result of scams in 2014 actually declined by 8% compared to the year before. This is the second consecutive year that financial losses from scams have decreased.
The percentage of people reporting losses to the ACCC also declined, from 14% in 2013 to 12% in 2014, however the ACCC data shows the number of losses associated with “computer hacking scams” doubled in the same timeframe.
The majority of people who reported scams to the ACCC in 2014 (88%) reported no financial loss, while more than one third of the people who did report losses said the total amount they lost was between $100 and $499.
But over 10% of people who were scammed reported losses of more than $10,000 and there were 14 incidents of financial losses of more than $500,000.
ACCC deputy chair Delia Rickard said in the report scams are increasingly targeting the online environment, with identity theft scams continuing to be reported in “significant numbers”.
“Not only do we see increased levels of directly reported identity theft but we also see the deliberate misuse of personal information underpinning several of the scam categories where major financial losses are reported,” Rickard says.
Rickard says while it is “pleasing” to see the total financial losses associated with scams decline, the ACCC says “actual losses are likely to be much higher than what is reported to the ACCC”.
Combo managing director David Markus told SmartCompany while consumers and business owners alike are more aware than ever of scams, he believes there is a shift from scams that required active participation from people, such as email scams that invite individuals to give out their personal details, to scams that use particular virus to encrypt a user’s data and then demand a payment.
“I think it is changing shape,” Markus says.
“Scams previously required willing participating to hand money over but now they are more malicious. People have moved on from the random hope that someone bites by putting a hook in the water to a more sophisticated net that is harder to get away from.”
But Markus says there is one key step every small business owner can take to guard itself against scams and that is to back up their IT systems.
“There is one big one out there and I am amazed at how I often I see it – you have to back up every day,” Markus says.
‘Every business that runs on computers is dependent on its data.”
Markus says it is important small business don’t confuse backing up their systems with simply replicating data.
“You don’t want to be the business that can’t restore their data,” he says.