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Real estate businesses have been pinpointed as among the multi-industry victims of payment redirection scams last year, which resulted in over $14 million in losses among Australian businesses.
In 2021, that figure looks likely to climb much higher, with average losses already more than five times higher than the average losses reported over the same period in 2020, according to the Australian Competition and Consumer Commission (ACCC).
The ACCC noted the increase in total losses was attributed to the widening reach of scammers across a range of different organisations.
Essentially, a payment redirection scam, or a business email compromise scam, sees scammers impersonate a business or its employees via email and request that money is sent to a fraudulent account. These amounts are often owed to the legitimate business.
Due to the nature of payments in the real estate sector, agents and agencies are among those affected by these scams, which also impact vendors, buyers, landlords and tenants.
In some instances, scammers hack into a legitimate email account and pose as the business by intercepting legitimate invoices and amending the bank details before releasing emails to the intended recipients, the ACCC revealed.
One victim of such a scam reported losing $16,500 in a single transaction after a scammer used a staff member’s email address to send an invoice to a customer with “updated bank details”, redirecting the payment to the scammer’s personal bank account.
Scammers can also “spoof” or impersonate CEOs or senior managers using a registered email address that is very similar to the genuine email address so they could request fund transfers or third-party payment from staff.
“Payment redirection scams impact businesses across many industries, including real estate, construction, law, recruitment and universities,” ACCC deputy chair Delia Rickard reiterated.
She flagged that it is often new or junior employees and volunteers who are targeted by scammers, “as they are less likely to be familiar with the finance processes of the business as well as the types of requests that they can expect from their supervisors”, Ms Rickard added.
The ACCC “recommends organisations ensure their staff are well trained in the company’s payment processes and remain aware of payment redirection scams”.
Ms Rickard advises employees to avoid deviating from the organisation’s payment procedure, even if the request appears to have come from the CEO or senior managers.
“If you have received a request that creates a sense of urgency, don’t rush. Take the time to consider and check whether an email is real, including by looking carefully at the sender’s email address, before acting on instructions,” Ms Rickard said.
“Whenever there is a request to change payment details, always check with the organisation using stored contact details, rather than those in the requesting communication.”
Ultimately, prevention is key, as “it can be difficult to recover money lost to a payment redirection scam”, the deputy chair highlighted.
Other forms of scamming include posing as staff members then requesting that the employee’s salary be paid into the scammer’s bank account, or posing as the president or treasurer and requesting staff to action payments for “equipment” or other business needs.
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