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Payment Fraud Continues to Plague Aussie Business

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By Published On: April 9, 20240 Comments

Financial technology platform Adyen has revealed that Australian retail businesses lost an average of $2.2m to fraud in 2023.

The Adyen Index Australia: Retail 2024, developed with the Centre for Economic Business and Research (Cebr), exposes the impact of fraud on the Australian retail sector. The report found nearly half of Australian retailers (43 percent) fell victim to cyber attacks or data leaks over the last 12 months, an increase of 10 percent year on year. 

Despite this significant increase in fraudulent activity, only 67 percent of businesses said that they have effective fraud prevention systems in place – an increase of only nine percent year on year. 

“Fraud is a pervasive challenge for retailers, and our 2024 Retail Index findings demonstrate how it could be significantly impacting profits” said Hayley Fisher, Australia & New Zealand Country Manager at Adyen. “There’s no one solution to fraud defence, as a strategy will need to be tailored based on the business model and platforms used to make sales,” Hayley continued. “With technology in place, such as machine learning tools, retailers should be able to recognise genuine customers and spot fraudulent activity across their sales channels.” 

As risks continue to increase, consumers are changing their shopping behaviours. Payment fraud is a huge concern with 63 percent of Australian consumers now feeling more unsafe when shopping today compared to 10 years ago, due to the increased risk of payment fraud. Adyen notes that globally the figure stands at 25 percent, meaning Australians are more concerned than their international counterparts.

This payment fraud concern comes as the ACCC issued a notice this week warning consumers and business owners to beware of fake invoices from scammers impersonating businesses. Last year, Australians reported losing $16.2 million to payment redirection scams. 

“Scammers are sophisticated criminals and are becoming more targeted in how they exploit Australian consumers and businesses,” ACCC Deputy Chair Catriona Lowe said. “These criminals are posing as genuine businesses that a consumer has recently dealt with, sending fake invoices with altered payment details so that the money ends up with the scammer.”

“This scam is hard to detect because the scammer will either hack into the email system of the business or impersonate the business’ email address by changing as little as one letter,” Ms Lowe said.

Often, victims won’t even be made aware of this type of fraud until the legitimate business informs them of overdue debts. 

The ACCC issued the following guidance for avoiding these types of scams:

STOP – Don’t rush to act. Take the time to call the business you are dealing with – using independently sourced contact details – to check the payment details are correct.

THINK – Ask yourself if you really know who you are communicating with? Scammers can make invoices appear legitimate by copying logos and ABNs. Scammers can send emails that appear to be from the business you have been dealing with – only changing banking details on invoices.

PROTECT – Act quickly if something feels wrong. If you have shared financial information or transferred money, contact your bank immediately. Help others by reporting to Scamwatch

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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