The Business Email Compromise scam continues to be an effective scam perpetrated against many companies.  According to recently released FBI figures the amount of money lost to victims of this scam doubled in 2018 from the previous year to a record 1.2 billion dollars. 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.

Earlier this year, police in Hong Kong arrested a woman found to have received two million dollars alleged to have been stolen from ten companies in Indonesia, the United Kingdom and the United States using this scam. The woman arrested is alleged to have been involved in the laundering of the funds. Hong Kong police discovered that the criminals hacked into the computers of the targeted companies and gathered information and email addresses. They then leveraged this information to slightly change legitimate email addresses of companies dealing with the targeted companies and request that the targeted company send money to new bank accounts of the targeted companies business partners.

TIPS

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.  Emails requesting payments to be sent to new bank accounts should also 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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