Wire transfer fraud is a dangerous and difficult-to-counter scam that can take many forms. We’ve already covered several ways scammers commit this fraud, all centered around business email compromise. These scams utilize fake executive emails, vendor invoices, and fake law offices and lawyer emails. The final variety of wire transfer scams most relevant to your business is through fake employee emails. Wire fraud through fake employee emails combines elements from both fake executive email scams and vendor invoice scams.
How It Works
For a fake employee email scam, fraudsters will carefully research their potential target. The scammers will look for companies that regularly send out billing and have a designated employee that handles billing. Like with fake executive scams, the fraudsters will research the company to determine the identity of the payables clerk. If the clerk’s email information is not listed on a platform such as LinkedIn, the scammers will call the company asking to be directed to the clerk in order to receive their contact information. All they must do is use a simple lie such as that they are the new accountant for the target company’s pre-existing client and would like the clerk’s information in case any problems arise with paying invoices.
Unlike scams utilizing fake executive emails, scammers will usually choose to hack the payables clerk’s email. This grants them access to the employee’s contact list, allowing them to identify the correct emails for various clients. As outlined by the IC3, scammers will send out emails to various clients regarding a change of bank information. The scammers will direct the clients to send all payments to their account, disguised as the hacked company’s new account.
Identified Too Late
Companies that have fallen victim to BEC often do not realize they were hacked until after a billing period. The first time the company sends invoices out, the clients will pay to the fraudulent bank account. Once payment is due and the hacked company has not received payment, they will either send another notice out or reach out to the client. Eventually the payables clerk will communicate with a client only to discover the client already paid, but to the fraudulent account.
If the scammers are able to compromise a large company, one billing period is more than enough to steal a noteworthy sum from the various clients. The money stolen through wire fraud is likely directed to a foreign bank, typically in Asia, and by the time the companies realize they were hacked, the money will have been withdrawn and be nearly impossible to recover. To make matters worse, some corporate insurance plans do not cover wire fraud incidents, so the losses you and your clients suffer may not be recuperated.
Sooner or later your business will likely be targeted as part of scam involving business email compromise. We’ve detailed the various forms of wire transfer fraud so that you can better identify suspicious activity. In our next few articles, we’ll be covering how to help protect yourself from BEC, as well as what to do if your company has fallen victim to a scam.
In the meantime, if you have been the victim of an email compromise scam, call McCann Investigations at (800) 713-7670. We will provide a free consultation and outline the steps you and your response team need to take to gather and maintain the evidence you need to pursue litigation or an insurance claim. We can also explain the critical use of an licensed investigator to perform the forensic investigation and provide an objective opinion on the origination and scope of the compromise scam.
Contact Dorothy Filippov, Certified Fraud Examiner, at McCann Cyber: (346) 400-6554.