Be careful with that big tax return, it could be a costly scam

The ATO's $26bn in rebates is a tempting honey pot for scammers.

Six weeks ago, companies in 64 countries ground to a halt — their computers frozen by brazen hackers demanding a ransom to get them going again.

It was just one of many attacks, and cyber security expert Craig McDonald says Australia is experiencing an explosion in cyber-crime.

"For the past 24 months we've seen a rise in cyber crime here in Australia of about 300 per cent, which is consistent globally, but even in the last couple of months that's actually increased to about 400 per cent," Mr McDonald told the ABC.

That comes as a huge cost to the economy. Each cyber-attack costs an average $276,000.

"Those that are reporting, it's now starting to hit into the, definitely into the billions, and it wouldn't be too much to start seeing it into the trillions once you start looking at the total economic impact," Mr McDonald, head of cyber crime firm MailGuard, said.

And it's not just corporates in the scammers' firing line.

Not just the careless are being scammed

It is tax time, and the prospect of getting their hands on some of the $26 billion the ATO pays out in refunds, attracts scammers like bees around a honey pot.

"This year already we've had about 29,000 reports of scams and we know that people have lost about $1.6 million," assistant tax commissioner Kath Anderson said.

But tax time is only just beginning.

"We see people who put things on social media; they'll put a copy of their drivers licence or something that otherwise identifies them, and makes it available to everybody to be able to use," Ms Anderson noted.

But not everybody is careless. Microsoft's Troy Hunt said some were just duped by criminals getting increasingly sophisticated.

"It's very much a low-risk crime and in many cases, even when we see crimes committed against Aussies in terms of fraudulent activity with the ATO or anyone else, it could be perpetrated by people on the other side of the world."

Beware of that generous tax rebate

The reality of the situation hit home to your correspondent recently.

A few weeks ago, my 20-year-old son received an unexpected $8,000 gift from the Tax Office.

Scammers had hacked his details to file a fake tax return. It didn't take long before a bogus tax official called demanding the refund be repaid, although that repayment wasn't ever intended for the Commonwealth's consolidated revenue.

"If somebody gets hold of your personal information, they can create a return that looks legitimate and so even with all of that we can't necessarily detect every return that's incorrect," Ms Anderson said, defending the ATO for paying out on fake tax returns.

While many believe the ATO should pick up on the fraudsters, cyber-crime expert Troy Hunt is prepared to cut it some slack.

"If it had have been $1 million, I am sure they would have paid more attention to it," Mr Hunt said.

"Less than $10,000, I can imagine how that is something which is a fairly common anomaly, if not a little bit strange for this individual."

Mr Hunt adds that while the Tax Office isn't blameless, there are limits to how tight its security can be.

"Can they do more? You can always strengthen security, but the challenge for an organisation like the ATO is that they need to make these systems useable and accessible to people as well," he said.

The ATO has a warning for anyone who wrongly receives a larger-than-expected tax return.

Don't spend it, because when the scams are uncovered, it will want its money back.