More than a third of small and medium Kiwi businesses have been targeted by scammers in the last year, but over that period only around half have invested in specific measures to reduce their fraud and scam risk, new Westpac NZ research shows.
Small to medium businesses with an annual revenue of $100,000 to $500,000 reported being targeted the most, and most often by email, with smaller businesses more likely to receive a phone call or text.
Of the 657 business owners who took part in the Westpac survey, 38% had received one or more fraud or scam attempts in the last 12 months, and one in 10 of those targeted reported suffering a financial loss as a result.
Westpac NZ Senior Manager Financial Crime Operations, Matthew Kinney, says scams are a constant threat that businesses need to protect themselves against.
"These findings should serve as a wakeup call to business owners that the threat of financial crime is very real, and they should stay vigilant and prepare their businesses accordingly - whether through beefed up systems or staff training on how to spot scams," Mr Kinney says.
"In the first half of this year, our businesses customers were most likely to be targeted by a bank impersonation scam, and that is also the scam type they lose the most money to," he says.
"Bank impersonation scams made up 71% of gross losses experienced by our customers in the first half of this year. The average gross loss to the end of June this year compared to the same period last year jumped up by 78% to more than $150,000.
Stopping impersonation scams
Victims of bank impersonation scams often end up sending their funds to countries that have real-time payment systems, so money can be shifted very quickly to avoid banks and authorities, Mr Kinney says.
In one case, a business customer was contacted by a scammer claiming to be from Westpac who convinced them that fraud had occurred on their account and directed them to download remote access software to continue to be able to access their account.
"The customer was sent a fake website to load their credentials, which gave the scammer the ability to log in to the customer's Business Online account, and transfer $148,000 out to the money transfer company," Mr Kinney says.
"The customer regularly made such transactions, so this one didn't stand out to our monitoring systems, but fortunately a staff member at the money transfer company felt something wasn't quite right and held the payment up.
Six other transactions were also attempted, which triggered Westpac's fraud system and further prevented payments going through.
"The next day the scammer accessed the customer's mobile phone and called the Westpac team, impersonating them to process three of the transactions and have the funds released. Our staff member saw the alerts in our system, realised something wasn't right, and alerted the customer's relationship manager.
"Because the customer's phone had been compromised, our customer manager then drove out to see the customer in person to let them know they were talking to a scammer, not the bank. With the help of our technical people, they managed to block the scammer's online banking access, helping prevent and ultimately recover the almost $500,000 in total the scammer had tried to transfer out.
"This is a good example of how we're getting better at seeing and stopping scams all the time. But customers need to remain vigilant - especially smaller companies that often have fewer formal systems, processes or internal checks, and limited time, expertise and resources to combat scams.
"If you're unsure what your business needs to do to better guard against financial crime, talk to us or check out our online resources for guidance on where to start."
Tips for staying safe
Westpac NZ is helping customers combat scams through the Business Cards Hub on the Westpac One Business banking platform, which includes the ability to block or unblock a business card; real time transaction visibility for cards and pending transactions; and the ability to request contactless and cash withdrawal permissions be turned on or off. More than 90% of Westpac's Business Online customers are now on Westpac One Business, and the remainder will be on the platform by late September.
Other reminders to help keep businesses safe from scams include:
· If you're ever unsure about a call from us or any other bank, hang up and call back using a number listed on the public website.
· If you believe you have been contacted by a scammer and shared any information, please call us immediately, contact your Relationship Manager or visit your local branch.
· We will never ask for your login details - including your username and password - by email or phone.
· We will never send direct links to log in to our online banking platforms via email or SMS.
· We'll never ask you to give us remote access to your computer or phone, or to download software like Anydesk or Team Viewer.
· We'll never ask you to move money to another account to keep it safe or help us catch criminals or hackers.
Survey Results
In the past 12 months, has your business received a fraud or scam attempt (for example, a suspicious call, email, message or approach), even if no loss occurred?
Annual revenue less than $100k |
Annual revenue $100k to $500k |
Annual revenue $500k to $2m |
Annual revenue $2m or more |
|
No |
64% |
59% |
62% |
66% |
Yes, one |
15% |
25% |
23% |
18% |
Yes, more than once |
22% |
16% |
14% |
16% |
Through which channel(s) did this fraud or scam attempt occur?
Annual Revenue less than $100k |
Annual revenue $100k to $500k |
Annual revenue $500k to $2m |
Annual revenue $2m or more |
|
63% |
59% |
71% |
70% |
|
Phone call |
45% |
38% |
42% |
39% |
Text message (SMS) |
39% |
47% |
35% |
22% |
Online marketplace or social media |
11% |
11% |
1% |
4% |
In person |
3% |
9% |
13% |
7% |
Other |
0% |
1% |
2% |
4% |
Did any fraud or scam in the past 12-months have an impact on your business?
Annual Revenue less than $100k |
Annual revenue $100k to $500k |
Annual revenue $500k to $2m |
Annual revenue $2m or more |
|
No, we did not engage with the scam |
92% |
86% |
83% |
91% |
Yes, financial loss |
8% |
13% |
15% |
4% |
Other impact |
0% |
1% |
1% |
4% |
In the past 12 months, has your business invested in any measures to prevent or reduce the risk of fraud or scams?
Annual Revenue less than $100k |
Annual revenue $100k to $500k |
Annual revenue $500k to $2m |
Annual revenue $2m or more |
|
No, the business has not invested in any specific measures |
63% |
41% |
27% |
28% |
Yes, staff training and awareness |
21% |
35% |
46% |
55% |
Yes, technology and tools |
15% |
28% |
38% |
43% |
Yes, changes to processes or policies |
2% |
11% |
17% |
21% |
Yes, external advice or services |
2% |
3% |
4% |
6% |
