This is another fraud about which I have written a number of times in the past that continues to plague businesses around the world.  It is called the Business Email Compromise scam (BEC) and the FBI  has noted a 1,300% increase in this crime since 2015.  The scam involves an email to the people who control payments at a targeted company. These people receive an email purportedly from the CEO, company attorney or even a vendor with whom the company does business requesting funds be wired to a phony company or person.   At its essence, this scam is remarkably simple and relies more on simple psychology instead of sophisticated computer malware.  Often the scammers will do significant research to not only learn the name of the key employees involved with payments within a company, but also will infiltrate the email accounts of company employees for a substantial period of time to learn the protocols and language used by the company in making payments.  The scammers will also gather information from the company’s website and from social media accounts of its employees, all in an effort to adapt their message to seem more legitimate.

The latest company to fall victim to this scam is Leoni AG, a German company that is one of the world’s biggest manufacturers of electronic cables.  It recently lost 40 million euros (approximately 44.6 million dollars) when it wired money in response to an email that was written in a manner that showed familiarity with Leoni’s internal procedures for approving and transferring funds.  Generally this occurs when the hackers have infiltrated the computer systems of their victim for sufficient time to observe how payments are made.


In order to avoid this scam, companies should be particularly wary of requests for wire transfers made by email. Wire transfers are the preferred method of payment of scammers because of the impossibility of getting the money back once it has been sent.  Verification protocols for wire transfers and other bill payments should be instituted including, dual factor authentication when appropriate.  Companies should also consider the amount of information that is available about them and their employees that can be used by scammers to perpetrate this crime.  They also should have strict rules regarding company information included on employee social media accounts that can be exploited for “spear phishing” emails which play a large part in this scam.  Finally, employees should be specifically educated about this scam in order to be on the lookout for it.