The Federal Bureau of Investigation (FBI) is warning businesses about a sophisticated email scheme that has resulted in $1.2 billion in losses worldwide. In the United States, scammers defrauded more than 7,000 companies between October 2013 and August 2015.
The Business Email Compromise – or BEC scam – typically targets businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. The perpetrators compromise legitimate business e-mail accounts by utilizing social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.
Increased volume of BEC scams
The FBI last alerted businesses about the so-called BEC scam at the beginning of the year. The agency is sounding the alarm again because there has been a staggering 270 percent increase in identified victims and exposed loss since January 2015. “The scam has been reported in all 50 states and in 79 countries,” the FBI alert states. “Fraudulent transfers have been reported going to 72 countries; however, the majority of the transfers are going to Asian banks located within China and Hong Kong.”
While the BEC scam can take a variety of forms, the FBI’s latest alert highlights an increasingly common variety that involves fraudsters identifying themselves as lawyers or law firm representatives. The scammers contact victim businesses by phone or email and claim to be handling confidential or time-sensitive matters. According to the FBI, the perpetrators pressure victims to act quickly or secretly in arranging the transfer of funds. Additionally, the fraud may be timed to occur at the end of the business day or work week or to coincide with the close of business of international banks or other financial institutions.
Steps to take in BEC scam defense
To defend against BEC scams, the FBI recommends that businesses adopt cybersecurity and data protection measures, including:
Create intrusion detection system rules that flag e-mails with extensions that are similar to (but not exactly matching) company e-mail.
Register all company domains that are slightly different than the actual company domain.
Confirm changes in vendor payment location by adding additional two-factor authentication such as having a secondary sign- off by company personnel.
Authenticate requests for transfers of funds. When using phone verification as part of the two-factor authentication, use previously known numbers, not the numbers provided in the e-mail request.
Know the habits of your customers, including the details of, reasons behind, and amount of payments.
Carefully scrutinize all e-mail requests for transfer of funds to determine if the requests are out of the ordinary.
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