SMEs cautioned against ‘too good to be true’ investment opportunities

New data from the Commonwealth Bank of Australia (CBA) has revealed that small-business owners face significant risks with the prevalence of scams such as phishing and business email compromise during the financial year.

The data, which looked at the number and types of scams reported by CBA small businesses in the last financial year, showed investment scams, phishing, and business email compromise continued to be the most prevalent scams targeting Aussie small businesses.

Investment scams offer fake money-making opportunities, often with the promise of unrealistically high or above-market returns and seemingly coming from legitimate sources.

Business owners and leaders may be at higher risk of being targeted for investment scams because they’re more likely to have disposable funds to invest.

CBA’s executive general manager, small-business banking Rebecca Warren said while it is encouraging to see CBA customer scam loss decreasing overall, small businesses remain a prime target and the impact could be severe.

“If a business owner or leader falls victim to an investment scam, it’s not just the business that could be compromised, but also the jobs of the people who work there,” Warren said.

“We can see through our data that small businesses lose around $30,000 on average to investment scams, which can have a devastating impact, both financially and emotionally.

“When they make an investment into what they think is a term deposit with a great interest rate, they tend to put in most of the money they have available, to maximise their returns.

“We know running a small business is tough, and our priority is to help protect our customers from scams. Our focus is on early detection and prevention of scams through fraud prevention and monitoring activity, industry-leading features, and education.”

One such feature – NameCheck – prompts customers if the account details on a first-time payment don’t look right based on available payment information.

Additionally, CallerCheck allows customers to verify whether a caller claiming to be from CBA is legitimate, by triggering a security message in the CommBank app.

CBA may also use CustomerCheck to identify our customers in branch or over the phone by sending a message to the CommBank app.

CBA has invested more than $800 million to help protect customers against fraud, scams, financial and cyber crime, but Warren said that scams are least effective when people stop and check and then reject.

“While the Bank’s technology is designed to help detect and prevent fraudulent activities, it is crucial for customers to take proactive steps to protect themselves. It is imperative that they know what to look out for,” Warren said.

[RELATED: Over 1/4 of brokers hit by scams in the last 12 months]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.