Small Business Scams Research
Are you a business owner at risk of being scammed?
Do you know what the common and emerging scam risks are for small businesses and just what the level of loss is in your industry?
Research overseas suggests that the majority of small businesses will sooner or later burn money and time to scammers. A recent study conducted by the Federation of Small Business in the UK showed that 54% of small businesses had been a victim of some form of online crime or fraud. Yes, that’s right more than half!
Here in Australia recent data released by the Australian Bureau of Statistics indicates that over one third of Australian consumers were exposed to a scam in 2011, with roughly one in ten of those exposed lost money to the scammer.
What about small businesses in Australia? Do they get scammed as much, more or less than individual consumers?
We conducted some preliminary enquiry in 2011 with WA small businesses, which suggested that the rate of loss from businesses was potentially much greater and certainly of a different nature than consumers were experiencing. In addition, it was of great concern to discover that perhaps one in eight small business owners were unable to determine whether they had been scammed or not. So, if you are unsure, you are not alone.
After that initial ‘call to action’ we determined to undertake a national study of small business scam prevalence. This project was funded entirely by Curtin Business School but we received great support from the ACCC and a range of small business associations around the country to promote the study. The first message we want to share from the findings is:
We discovered that one in eight businesses had lost amounts between $100 and $10,000 to the scammers and as a consequence spent up to 100 hours of their time dealing with the aftermath. This tells us that if you are in business and have not experienced a scam attempt or loss yet the overwhelming evidence is that you are in a ‘lucky minority’. The numbers suggest you could be next…
In any case we encourage you to read the national report uncovering and describing the extent of the problem as we also reveal 32 strategies businesses are employing to beat the scammers.