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.
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
