Business Email Compromising (BEC) Scams Are Attacking The Corporate Sector
Emails are the most common source of conducting business, all essential communication regarding business activities is done through emails, considering it professional.
BEC is also known as a man-in-the-email scam, which is a most sophisticated and well-structured or planned scam carried out by attacking businesses ‘ legitimate email accounts through computer coding and technology or by manipulating the victims to transfer funds into scammers’ accounts, thus, making unauthorized transactions. BEC is the most widespread fraud and scam that makes businesses suffer plenty of losses, it has existed ever since email accounts exist. However, it has evolved over time.
Initially, the scammers used to hack into the CEO’s and CFO’s email accounts and make them send payments to fraudulent accounts. With the passage of time, it started targeting the personal emails of business employees, lawyers, and agents.
The FBI reports have stated $26 billion in losses due to the BEC scam over three years. In addition, alone in 2021, nearly $2.4 billion was stolen by the scammers through the BEC scam. There has been a 33% increase in this particular kind of scam since 2020. Alone in 2020, 20,000 complaints were received. Further, from 2018 to 2020, $0.57 billion has been reported lost. Thus, BEC is the most threatening scam for a business that is constantly increasing.
The Dangers of A BEC Scam
Scammers send emails from an unknown source targeting business regular operating activities. The scammers initiate their illicit work by doing research on the company they plan to target and lure into their fraud.
The details of the respective business customers and corporate data help them make the most suitable plan. Thus, the businesses who conduct daily transactions are easy to trap by making a legitimate request for money transferring which then results in the business making a huge loss with an intention of profit-making and business activity. Further, some scams involve a group of people working together, each of them making the company transfer financial assets to each account, resulting in losses of billions. Once the scam is carried out, the scammers then disseminate the information in order to reduce the traceability. Thus, it becomes very easy for scammers to run away.
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Recent Classifications of the BEC Scam
The BEC scammers are well-organized and planned, thus, they use multiple ways to trick the companies and get access to their financial assets. The following are the classification of how scammers can conduct this fraud.
1. Company’s Personal Data Theft
The scammers target the company’s personal data by getting access to HR or managers’ personal information from where they retrieve the information required to set their plan. The HR and managers’ accounts contain daily business activities.
2. Executive Frauds
Targeting CEOs means making it way easier for scammers. CEOs are very less likely to ignore their customer’s or business partners’ emails, thus, the scammers cover themselves as essential associates of business, making executives transfer funds to their accounts. They save themselves from multiple approving procedures.
3. Legal Representatives
Legal representatives are considered the backbone of the business. The lawyers represent the firms and business, thus, they have access to all essential details and accounts of the firms.
Therefore, the scammers target legal representatives to get hold of business details. Further, the scammers also manipulate their identity as lawyers and target employees who have less information about how to conduct business, yet, crucial information about internal business activities which can assist the scammers. They make urgent legal requests which are actually hacking data procedures.
4. Suppliers Of Company
The online manner of conducting business has added many risks for firms. The agreement between the vendors and suppliers side requires firms to pay in advance. Now, since firms trade in products in millions and billions, huge amounts of payments are transferred to scammers – wearing masks of vendors.
Once the business makes advance payments to fraudulent accounts, the scammers disseminate the details leading to their identity and disappearing, causing huge losses to the business.
5. Installing Malware Software Programs
The emails from scammers contain links that might state a legitimate reason for company employees to link to them. It could be an updated account request and gift cards or cash prizes that encourage the employees to be attracted to it.
That link installs the malware software on personal accounts and then the scammers can access all the details from passcode to bank account details and financial assets.
What Are Multinational Organizations Doing to Protect Themselves From These Scams?
1. Avoid Unsolicited Emails Accounts
Scammers are more likely to contact the firm with unknown and unsought emails. They would be harder to recognize due to the urgent and illegitimate requests they might make. However, the firms can only avoid it by verifying the domains of the accounts.
2. Make RTA Agreement
The RTA agreement secures the bank accounts of both the customer and the firms by altering the banks before transferring, it makes a huge contribution to the prevention and protection from scams.
3. Make Payments after Verification
The payments are made to illegitimate accounts by firms, therefore, they should initially verify the account details and history to avoid any misfortune from happening. Additionally, the firms should not act immediately after receiving the request, this could result in a huge loss.
Key Takeaways!
The BEC scam’s immense increase has threatened a safe space for conducting a business. The research was conducted which unrevealed Nigerian influencers and scammers who carried out scams by learning malware software programs initially in 2014, and by 2018 the Nigerian malware were being developed by BEC scammers.
The reports have claimed to recover $11 million from the scammers. The BEC scam causes loss to firms of billions, which could be demonstrated by Nigerian influencers, who show off their wealth – luxury hotels, private jets, and expensive cars created by scamming well-known firms through emails. He was pled guilty to the BEC scam and set for sentencing in July. Thus, the scammers use various tactics and tricks to get access to a firm’s financial accounts, which can be prevented by companies if they set strict policies and verify accounts.
One of the best way to prevent yourself from BEC Scam is to educate yourself with the help of Chargebackway.
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