The end of financial year is a common time for scammers to target unsuspecting small businesses, the Australian Competition and Consumer Commission warned today.

In previous years the ACCC has seen a spike in the number of small business scam complaints after the end of the financial year.

In general the most complained about small business scams relate to false billing which involves false invoices for advertising, directory listings, domain names and office supplies. The total reported loss to the ACCC in the 2010 calendar year for false billing was $966,844.

ACCC deputy chair Michael Schaper said at this time of year small business owners need to keep their guard up to avoid invoice and billing scams.

There are many methods scammers use including:

  • sending invoices for payment of goods or services which the business did not request – such as unordered business supplies
  • charging for advertising which the business did not request
  • providing fake directory listings.

"These types of scams aim to trick your business into agreeing to ongoing payments for goods or services you didn't order," Dr Schaper said.

The ACCC has provided small businesses with some tips to avoid scams:

  • know your suppliers - keep written records of all orders and purchases, and only deal with suppliers you know and trust
  • limit the number of people in the business authorised to place advertisements and to pay accounts
  • check the legitimacy of any offer by contacting the organisation using their official contact details - don’t rely on the details provided to you on the invoice or offer as it is very common for scammers to pretend they are affiliated with a reputable business
  • educate staff about scams and instruct them to be cautious when examining all accounts or offers. 

The new Australian Consumer Law protects businesses from unfair and dishonest sales methods. For example, in April 2011 the Federal Court imposed penalties totalling $2.7 million against two overseas companies, Yellow Page Marketing BV (YPM) and Yellow Publishing Limited (YPL), for sending thousands of Australian businesses misleading faxes and invoices in an attempt to obtain subscriptions to their online business directories.

If you think you have been sent a false invoice or have received any illegitimate offer you can report a scam: 

  • through the SCAMwatch website 
  • to the ACCC Infocentre on 1300 302 502, or     
  • contact your local fair trading office. 

For more information and to stay one step ahead of scammers, follow SCAMwatch on Twitter or visit the SCAMwatch website