Scams and Cybersecurity Threats: How Small Businesses Can Stay Protected

Scams targeting small businesses are increasing in frequency and sophistication, requiring vigilance and proactive measures. A survey found that one in nine small businesses experienced a scam in the past year, with financial losses exceeding $10,000 for 20% of victims. Cyber threats and scams often overlap, using tactics like phishing, ransomware, and business email compromise. While 70% of businesses feel prepared, 8% report being unprepared. Key protective measures include employee training, multi-factor authentication, verifying financial transactions, and updating security systems. The NSW Small Business Commission provides cybersecurity resources, including the CyberWardens program. Regular awareness and reporting can help businesses stay protected.

Scams and Cybersecurity Threats: How Small Businesses Can Stay Protected

Scams targeting businesses are becoming more common and increasingly sophisticated, making it essential for small business owners to remain vigilant and proactive.

As technology continues to streamline business operations, it also expands the risk of scams and cyber threats. Fraudsters are employing more advanced tactics, and small businesses must stay cautious—particularly when dealing with unfamiliar individuals or suspicious situations. Since human error is a major vulnerability, it’s critical to equip both employees and systems with the necessary knowledge and tools to detect and counteract potential threats.

The Growing Threat to Small Businesses

A recent survey by the NSW Small Business Commission revealed that one in nine small businesses experienced a scam in the past year, with the rate increasing to one in seven for those in regional NSW.

Scams are a frequent issue, with 30% of small businesses targeted monthly, 20% facing scams weekly, and 9% encountering them daily. Financial losses can be significant—20% of scam victims reported losing over $10,000, while 11% suffered losses exceeding $50,000.

Although 70% of small businesses believe they can recognize and prevent scams, 8% admitted feeling unprepared.

The Overlap of Scams and Cyber Threats

While scams often exploit human trust and mistakes, cybersecurity threats typically stem from hacking and technical vulnerabilities. However, these risks increasingly overlap, as many scams now involve cyber breaches, and cyberattacks frequently use social engineering tactics.

Phishing emails, fake invoices, business email compromise (BEC) attacks, and fraudulent customer inquiries are among the most common scams affecting small businesses. Attackers often impersonate trusted entities, such as suppliers or government agencies, to deceive employees into transferring funds or sharing sensitive information.

Additionally, ransomware attacks continue to rise, where cybercriminals lock businesses out of their own systems and demand payment for access restoration. Even small businesses with limited digital infrastructure can be targeted, making it essential to implement strong security measures.

Strengthening Business Defenses

To help businesses mitigate these risks, various resources are available. The Commission’s Cyber Crime Awareness page offers valuable guidance on identifying vulnerabilities, while a dedicated guide provides strategies for protecting businesses from online threats.

For additional support, businesses can access comprehensive cybersecurity resources, including the CyberWardens program—a free online training course designed to help small business owners and employees strengthen their defenses against cyber threats.

Key Steps for Business Owners

1. Educate Employees – Conduct regular training sessions on recognizing scams and phishing attempts.
2. Enable Multi-Factor Authentication (MFA) – Add an extra layer of security to critical accounts.
3. Verify Requests for Payments or Information – Always confirm changes in banking details or sensitive data requests directly with known contacts.
4. Keep Software and Systems Updated – Ensure firewalls, antivirus programs, and operating systems are regularly updated.
5. Use Strong Passwords and Secure Networks – Implement password managers and avoid public Wi-Fi for business transactions.
6. Report and Share Knowledge – Encourage staff to report suspicious emails or messages and stay informed about emerging scam trends.

By adopting proactive cybersecurity measures and leveraging available resources, small businesses can significantly reduce their risk of falling victim to scams and online threats.