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BEC fraud is growing rapidly, but there are steps you can take to battle it.
Since 2013, Business Email Compromise (BEC), also known as CEO fraud, has cost U.S. businesses more than $180 million, and that number is rising. Since 2015, the scam has been reported in 79 countries and all 50 states. Federal Bureau of Investigation (FBI) numbers peg the average loss at about $100,000, but it can be—and has been—much more.
What is BEC?
A sophisticated email scam targeting businesses that regularly perform wire transfer payments and/or work with foreign suppliers, BEC has the potential to do great damage through fraudulent funding requests.
How Does BEC Typically Work?
The FBI offers the example of a CFO of a U.S. company who received an email from the CEO while the CEO was out of the country. The CEO requested a transfer of funds for a time-sensitive payment that required discretion. The CFO followed the instructions and wired $250,000 to a bank in Hong Kong. The next day, the CEO called about another matter. The CFO mentioned the wire had been completed, but the CEO said she never sent the email and knew nothing about the transaction. In this scam, the CEO’s email address was a single letter off from the real thing.
How Can I Protect My Business?
What If It’s Too Late?
If you believe your firm has been a victim of BEC, or if you can confirm that funds have been transferred to a fraudulent account, it is important to act quickly.
It’s hard to guard against determined scammers, but knowing how they work can help. You can gain information about protecting your business by reading the U.S. Department of Justice publication, Best Practices for Victim Response and Reporting of Cyber Incidents.
Contact me to discuss your company’s current cash management practices, and the service provided by Salem Five’s dedicated professionals.