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Brokers warned of heightened cyber scam risk during holidays

by Will Paige11 minute read

Cyber scams could pose a greater risk to brokers during the holiday season, LMG has said.

Brokers must be extra vigilant to the heightened risk of cyber scams during the festive period, according to aggregation group LMG.

Criminals may use the summer holidays, typically a time brokers let their guard down, to exploit skeleton staff and settlement deadlines at brokerages, LMG acting chief risk officer Luke Jarmaine said.

Brokerages are especially vulnerable to certain types of attacks.

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Business email compromise (BEC) and payment redirection scams lost Australian businesses $91.6 million in 2023, according to figures from the Australian Competition and Consumer Commission’s (ACCC) Targeting Scams report.

The report called out the real estate, legal and construction sectors as the most common industries targeted by this scam as they regularly deal with large transfers of money.

Brokers also handle large quantities of client information and the profile of the industry is rising, Jarmaine said, with brokers writing 74.6 per cent of home loans lodged in the September quarter, as shown by Mortgage & Finance Association of Australia (MFAA) data.

Given the growing dominance, brokers need to “strengthen their awareness of threats and procedures to diffuse them”, Jarmaine said.

“It’s critical for brokerages to have robust cybersecurity procedures and frameworks that can withstand shortages in staff over December and January”, he added.

“Businesses that simply put their head in the sand, or think that they’re too small to get the attention of scammers, are putting themselves at risk.”

LMG’s suggested cyber security procedures and frameworks that can withstand shortages in staff over December and January include:

  • Use multi-factor authentication.
  • Subscribe to a password manager.
  • Know your data. Record what data brokers have and where it is stored. Create a list of all the data they use or store, including customer records, business records and intellectual property.
  • Assess how vulnerable information is to a cyber attack. Identify where company data is stored, if it is backed up regularly and if it has been tested for recovery regularly.
  • Apply technical controls to help secure data. Install a firewall, set PINS/passwords/patterns on all devices and set up auto-updates on antivirus software, applications and operating systems.

Many players have been issuing cyber advice to the broker channel this year, as more Australians find themselves the target of scams and attacks. Almost two-thirds (63 per cent) of Australians experienced a cyber attack or data breach during the 12 months to October, according to a new report released by National Australia Bank (NAB).

The National Anti-Scam Centre also recently warned of an issue where perpetrators offer fake financial assistance, such as no-interest loan schemes, emergency relief, and rental aid, with the ultimate goal of stealing money or personal information (e.g., myGov credentials, bank details, driver’s licenses, or passports) for further criminal activity.

ANZ recently revealed it had helped prevent more than $120 million in customer losses to fraud and scams and provided advice on the tools to help brokers and borrowers protect themselves.

[Related: Borrowers targeted in new financial scam]

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