Scam Proof Your Business | BTalk Australia

(12min 23) Do you believe you’re immune to scammers? What about other people in your business? Scammers are becoming increasingly sophisticated and a lot of it will come to you over the phone, not over the internet.

In today’s BTalk Australia Phil Dobbie talks to Peter Kell, Deputy Chairman of the ACCC, about common scams and the Scamwatch website.

Add your comments, warnings or ideas in the Talkback section at the end of this post.

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• Today’s Transcript

Phil Dobbie: Hello I’m Phil Dobbie, and welcome to BTalk Australia. Today is your business immune to the scam.

Scammers we know have no ethics. We know that from the news that some scammers are trying to solicit money intended for the bush fire victims, and of course, taking it for themselves. So what scams is your business open to? Well Peter Kell is the Deputy Chairman at the ACCC. He was the head of the Consumers Association Choice until joining the ACCC last year. Now Peter we hear a lot about online scams, but I suspect we’ve got so much focus on those online scams that we perhaps leave ourselves open to a lot of scams, which actually start with a phone call don’t they?

Peter Kell: Look, direct word of mouth, having a conversation with someone over the phone can actually be a far more effective way for a scammer to extract money from you than an email. You’ve always got the opportunity to easily delete an email. In fact, in a past life I was also at the Australian Securities and Investments Commission, and we were involved in a very large telemarketing scam there that took hundreds of millions of dollars outside of Australia. And the callers in that instance had very carefully crafted scripts. And they targeted small businesses in particular, because they knew that many small businesses were used to getting calls over the phone, that was a normal way that they went about their operation.

Dobbie: And I guess part of it, I mean you mentioned telemarketing, pushy advertising people, sales people, we get them all the time. Sometimes difficult to know which ones, because they’ve all got the spiel, which ones are genuine and which ones are scams. I guess that’s a common problem, isn’t it?

Kell: It is a common problem. And I think it’s very important for people to realise that they’re sort of old style image of the scams to the popular image of the scruffy guy looking a bit down at a hill trying to flog you a ticket outside a concert or a sporting venue is no longer, unfortunately, the reality when it comes to a lot of these scams. They can be very sophisticated. They can look and sound legitimate. Unfortunately they’re run, in many cases, by criminal syndicates based outside of the country. So you do have to have your guard up, and you do have to be alert to the fact that some of these scams are, if you like, very polished.

Dobbie: And I guess that’s it, isn’t it? You’ve got to think twice and make sure that you’re not trusting somebody, particularly someone you don’t know. Because I guess a lot of these scammers are working on the assumption that small business, to an extent, not necessarily disorganised, but just busy. And if you make the assumption that someone else in the office has bought something or agreed to something, it’s best to check with them.

Kell: Look that’s a very good point. They do rely on people being busy, on people not doing the regular checks. And that’s why one classic example of a scam that targets small business is the so-called invoicing scams. Where you receive a fax, or perhaps a phone call, or an email asking you to pay for an advertisement, or a listing in a business directory, or a journal. It looks legitimate. The letterhead’s properly worked up. And before you know it you’ve sent off your $50 or $200 without actually checking whether this service was ever provided. And that’s a classic sort of scam that’s been around for a while, but unfortunately continues to generate victims.

Dobbie: And government departments as well. I’ve got to be careful what I say because you’re in one of them, but there’s so many of them. And I guess a lot of us don’t … someone could call saying they’re from a government department that we’ve never heard of about a regulation that we didn’t know existed. And it can put the frightness on people.

Kell: Scammers will attempt to intimidate you if they feel it’s going to work. Whatever it takes for them to sound legitimate or to get the money out of the line. So we certainly do see scams where scamsters pretend to be from government agencies, either locally based or even overseas government agencies that claim that there’s money owing or a fee that needs to be paid. And perhaps even threatening some sort of legal action if you don’t pay up. If you’ve got any doubts, the best thing to do is to contact the agency directly. Don’t rely on the phone number or the contact details that you’ve been given at first, try and go check it separately on the internet or through a telephone directory. And there’s nothing wrong, you don’t have to respond immediately, obviously, that’s one of the key tricks that scamsters will attempt to get you to do to respond before you’ve had a chance to check.

Dobbie: Now are they always asking for money, or are they sometimes asking for personal information? Is it sometimes a question of identity theft? The reason I ask is, is that I received a letter in the post a week ago saying there was $1,500 that I was owed, all I needed to do was prove my identity of the previous address and then send copies of my driving licence and a few other details just to prove who I am. Presumably you’re on dangerous territory; I should be asking a lot of questions there, shouldn’t I?

Kell: Yes. These days it’s not just about money, while that’s still the primary target of most scamsters, identity can also be very valuable to them. A driver’s license details, bank account details, even passport details. These can all be used by these operations for further crimes. And you do have to be careful, because even in situations where you may not directly lose money, some of your credit cards may be cancelled, or you may end up with some sort of record against you in ways that you’ve never anticipated. So before giving over that sort of information, again, always check. And ask yourself that sort of classic common sense question, would my bank be ringing me up out of the blue to ask me all these personal details without going through some very stringent security? Would I be getting those sorts of requests for just an email out of the blue? There’s nothing wrong with double checking that sort of thing. And any legitimate organisation will understand why you’d want to do those checks.

Dobbie: Whenever I get a phone call out of the blue from the bank and they ask for a few details to verify who I am, I feel like I should be asking them a few questions. Can you give me your date of birth? And your bank number?

Kell: Indeed it’s something that I think we’d all like to do. But, of course, the banks themselves are warning people, including small businesses about these sorts of scams. So that when you are responding to, for example, an email that has come from a bank, check carefully whether it’s, whether it is the genuine email site. Or sometimes it will just be small changes, such as instead of .com.au, it might be .net.au. So make sure you’re dealing with the real deal. Because, again, we’re finding that the scamsters are putting a lot of effort into appearing legitimate. It’s not just the days of those weird and wacky emails from Nigeria that did appear rather over the top, and that you do wonder how people might fall for it. There are a lot more sophisticated operators out there now.

Dobbie: And we’re still getting those Nigerian emails as well, of course. So tell me about the scam watch website. That’s there presumably to tell people about scams. How long has it been going? And is it working? Are you getting a lot of traffic to the site?

Kell: We’ve had the scam watch website up now for several years. And it’s scamwatch.gov.au. It serves a number of purposes. It provides details on a variety of scams and gives you some good advice about how to avoid those scams, whether they’re consumer scams, online scams, small business scams. We also seek to keep people informed about the most recent scams that we’ve heard of on the website. So you mentioned earlier the unfortunate case of these charity scams in response to the tragic Victorian bush fires. We have information up there about how you can be sure that you’re giving money, if you do wish to donate money to the Victorian bush fire victims, so you can make sure that it’s going to go to the right place, and other scams that are currently doing the rounds, so to speak. And we also provide a venue there for people to send information through to us via email or contact details if they’ve seen a scam, if they’ve seen an email, if they’ve had a phone call out of the blue. That helps us at the ACCC so we can investigate it and we can warn others. And in some instances, even if it is overseas we might be able to work with some of our overseas colleagues to look at whether we can shut these down.

Dobbie: Now I notice on the scam watch radar, as you call it, the global financial crisis is one to watch. So how are scammers using this as an excuse to extract money from people?

Kell: Look, I think there are two impacts that we’re seeing through the global financial crisis. One is that the overall level of scams is going up. Scamsters see new opportunities, and perhaps people out there if money’s a bit tight they’re more open to offers of money. So the overall level of scams is up. We, the ACCC, had a 60 per cent increase of scams reported to us in 2008 compared to 2007. So the overall level is up. The second impact is that we are seeing, or beginning to see, some scams that are specific to the global financial crisis. These emerged in the first instance in the United States where people began receiving emails that purported to be from their financial institutions saying, well with the uncertainty that’s going on at the moment and we’ve taken over some other financial institutions we’re going to have to check your details and you’re going to have to confirm your account number and those sorts of things. And it could sound legitimate in the current economic climate for financial institutions to be undertaking those sorts of checks. But, unfortunately, some of them have turned out to be scams.

Dobbie: OK, so to make sure you go to the right website it’s scamwatch.gov.au. Don’t be fooled by any impersonations. Peter Kell thanks so much for your time today.

Kell: Thanks very much.