Beware the latest internet scams

Several firms have been caught lately by simple but effective scams.

The first one is where the victim recieves an email from a supplier saying that their bank account details have changed and that they would like future electronic payments made to the new account. The victim believes the email to be genuine and changes the bank details in their system.

The next invoice comes in and they make the payment. The supplier never gets paid and by the time the scam is picked up the money is long gone. The largest amount scammed that I am aware of is over $500,000.

Before accepting any such email advice, it is important for the finance department to ring and verify that the email advice is genuine.

It is always possible that the scam is being orchestrated by someone within the supplier’s office and so I would recommend speaking to the Cheif Financial Office (“CFO”) or equivalent to confirm the email’s authenticity and then confirm the discussion in writing; recording who you spoke to, the date and time.  Like most risk management, this is simple good business practice.

The second scam is a potential customer ringing the credit card details through on the phone. Under most credit card companies’ terms and conditions, this is not acceptable and when the transaction proves to be false and/or the card holder disputes he ever got the goods, the victim is out of pocket and with no recourse from the credit card company. The most recent one I saw using this trick cost the SME business over $15,000, which was a fortune for them.

When it comes to insurance, hoax and trickery are basic exclusions under many business packs and similar wordings. Some specialist policies do cover this sort of event, but prevention is better than cure.

Here every business owner needs to understand the terms and conditions of taking credit card transactions and follow the rules no matter what story you are spun.

With on-line banking being the norm and more and more internet sales taking place, basic risk management procedures are necessary to protect a business from scams such as this.

I genuinely hope that this prompts you and your clients to be more wary and hopefully avoid being ripped off.

2 responses to “Beware the latest internet scams”

  1. Steve Dymond says:

    Great tips Allan. I wonder if it might be worth trying to get some basic cover for these events under a management liability policy? It might make more people buy the cover too.

  2. […] May 1, I posted an article on a couple of credit card scams that had crossed my desk. was advised of another one today by a Melbourne based broker with a similar but different variation […]

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