The FBI recently issued a new warning about the worsening of what has come to be known as the Business Email Compromise. Generally this 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 which 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 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. In other variations of the scam, the scammers seek personal information of employees such as W-2s which can be used for purposes of identity theft. In addition, according to the FBI the instances of this type of scam targeting people and companies involved in real estate transactions has dramatically increased in recent years. In these scams, the scammer poses as someone involved in a real estate transaction such as an agent, lawyer, title company, bank or seller and directs the sending of deposits or sales proceeds to the scammer.
According to the FBI between December 2016 and May of 2018 there was a 136% increase in global losses to this scam with total losses incurred during that time reaching more than 12 billion dollars. The FBI also identified banks in China as being the primary destination of funds stolen through this scam although banks in the United Kingdom, Mexico and Turkey have also been prominent destinations for funds stolen through this scam, as well.
In order to avoid this scam, companies and individuals 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.  Emails requesting payments to be sent to new bank accounts should be investigated thoroughly before responding. 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.
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