The Rise Of Bec Scams – What You Need To Know About CEO Frauds
In the present times, the middle-market businesses have a broad range of cyber security tools along with financial controls that help them guard against any sort of payment frauds. However, in the last few years, scammers have devised various different and creative techniques to circumvent such defenses one type of scam that is increasingly common, and specially quite challenging to detect, is the business email compromise scam, commonly called as the CEO fraud.
What Is Business Email Compromise Scam?
BEC scam, which is also called as the ‘CEO Fraud’, are sophisticated schemes that target managers and executives in businesses that regularly work with overseas partners and foreign suppliers. To perpetrate such schemes, a scammer will either compromise an employee’s email account – through deception or hacking- or spoof them email to make it appear like an email coming from the department head to ‘authorize’ a payment for a foreign account.
Scammers also use Business email compromise con to gain access to company held, confidential information for other fraudulent purposes. There are numerous companies out there that get targeted to such CEO frauds yearly, and FBI reports that this kind of fraud has led to billions of dollars in losses.
How BEC Frauds Take Place?
Business email compromise leverages ‘social engineering’ – the use of psychological handling that causes others to perform an action or provide sensitive information for the scammers. When a member of the company’s payables team receives an email that includes a payment request from the departmental manager, they perhaps not think twice about initiating the payment in a foreign account. For several businesses that get targeted by CEO frauds, such transfers are nothing less than a routine practice.
Who Gets Targeted?
From year 2015 to year 2016, there was a 10 percent increase in reported BEC scams among the surveyed companies. To limit the detection chances, fraudsters usually target large businesses with a high number of payment accounts, but companies of all sizes, in all industries are susceptible to BEC scams. The businesses that regularly perform wire transfers are usually targeted, but scammers perhaps also attempt a technique to trick the accounting departments into depositing payments by credit cards or checks.
How To Prevent BEC Scams?
As it is with all forms of cyber theft and fraud, preparation and vigilance is the key. A robust set of internal control can greatly help reduce the menace of email-based scams and payment frauds. Even if your business has not been targeted by a CEO fraud before, make sure you take vital steps to protect your business beforehand.