Ransomware attacks are being conducted at alarming rates, but even though the cost of these attacks is considerable, they are not the leading cause of losses to cybercrime. According to figures from the Federal Bureau of Investigation (FBI), business email compromise attacks are the costliest type of cyber fraud. In 2020, the FBI’s Internet Crime Complaint Center (IC3) received 19,369 complaints about business email compromise scams. $1.8 billion was lost to these sophisticated email scams in 2020 and many of these scams are never reported.
Business email compromise (BEC) scams, also known as email account compromise (EAC) scams, involve business email accounts being compromised by attackers and then used to send messages to individuals in the company responsible for making wire transfers. The goal of the attacks is to compromise the email account of the chief executive officer (CEO) or the chief financial officer (CFO), and to use that account to send messages to others in the company asking them to make a wire transfer to an attacker-controlled account.
Attacks are also conducted on vendors and their accounts are used to send requests to change payment methods or the destination account for an upcoming payments. In addition to requesting wire transfers, the scammers are also known to request sensitive data such as W2 forms, the information on which can be used to submit fraudulent tax returns to claim tax refunds. BEC scammers are also known to request gift cards or request changes to payroll direct deposit information.
BEC scams can result in major losses. Recently, a town in New Hampshire (Peterborough) was targeted by BEC scammers who successfully redirected multiple bank transfers before the scam was uncovered. The attackers sent forged documents to staff members in the Finance Department of the town to make changes to account information for various payments. The scam was sophisticated, and the scammers participated in multiple email exchanges between staff members. The attackers had conducted extensive research to find out about the most valuable transactions to redirect.
The scam was uncovered when the ConVal School District notified the town when they failed to receive a $1.2 million transfer of funds. Peterborough officials confirmed that the transfer had been made, with the investigation revealing the bank account details had been changed. Further investigation revealed two large bank transfers to the contractor used for the Main Street Bridge Project had also been redirected to attacker-controlled accounts. In total, $2.3 million was lost to the scammers and there is little hope of any of the funds being recovered.
BEC attacks are sophisticated, the attackers are skilled at what they do, and it is all too easy for employees in the finance department to be fooled into thinking they are conversing with the CEO, CFO, or a vendor via email, since the genuine email account is being used. The attackers also study the style of emails sent by the owner of the account and copy that style so as not to arouse suspicion.
There are steps that organizations can take to block the initial attack vector and to identify scams in time to stop any fraudulent transfers of funds. The primary defense against BEC attacks is a spam filtering solution, which will block the initial phishing emails used to obtain the credentials for internal email accounts. SpamTitan incorporates a range of features to detect and block these phishing emails, including machine learning technology that can identify email messages that deviate from the normal messages usually received by individuals. Outbound scanning is also incorporated, which can detect phishing attempts as the attackers try to use employee email accounts to compromise the accounts of their final target – the CFO or CEO. Rules can also be set to flag attempts to send sensitive data – such as W-2 forms – via email.
In addition to spam filtering, it is important for organizations to raise awareness of the threat of BEC attacks with the workforce, especially employees in the finance department. Policies and procedures should also be put in place that require any change to payment details to be verified by telephone using previously confirmed contact information. Implementing these simple measures can be the difference between blocking an attack and transferring millions of dollars directly to the attackers’ accounts.
If you want to improve your defenses against BEC and phishing attacks, give the TitanHQ team a call. Demonstrations of SpamTitan can be booked on request, and the full product – including full technical and customer support – is available on a free trial to allow you to see the solution in action and test it within your own environment before making a decision about a purchase.