The dramatic rise in business email scams in the past 12 months has prompted the Federal Bureau of Investigation (FBI) to issue a new warning. Companies of all sizes are being targeted with business email compromise scams which relieve companies of tens of thousands if not hundreds of thousands or millions of dollars.

The FBI warns that scammers are now going to extraordinary lengths to fool company employees into making transfers of large sums of company funds into hacker’s accounts. These attacks are far from the random email spam campaigns typically associated with email scammers. Companies are extensively researched, individual targets are identified, and carefully crafted emails are sent. A variety of social engineering techniques are employed to convince an individual in the company to make a sizeable bank transfer to the attacker’s account.

There are two main variants of these business email scams. The first involves gaining access to the email account of the CEO or a senior executive in the company. This is usually achieved with a spear phishing campaign. This phase of the attack involves researching the company and identifying a target. That target is then sent a spear phishing email in order to gain access to their email login credentials.

Once access to an email account has been gained, emails are checked to determine the style of writing used by that individual – How they sign their emails, the terminology they use, and the level of familiarity they have with the second target: An individual that manages money or makes bank transfers for the company.

An email is then sent from the executive’s email account requesting a transfer be made. Account details are supplied with a reason for urgency, and an explanation of why the request is being made.

Since the emails come from a known source within the company, and the terminology and style of the email matches those typically received by the accounts department, the transfer is often made without being queried.

Another variation on the same theme does not require access to an email account. Instead a domain name is purchased that is virtually identical to that used by the target company, often with just two letters transposed. Typically, an L in the domain name is replaced with the numeral 1, or the letter O with a zero. instead of for example.

These business email scams are highly effective because they take advantage of employees’ reluctance to query requests from authority figures in their organization. The emails are also crafted so as not to arouse suspicion.

Business Email Scams Have Netted Criminals Over $2.3 Billion in Three Years

Over the past three years the FBI has received complaints about business email scams from over 79 countries, and from every state in the U.S. Recently attacks have spiked in Phoenix, with other U.S. cities also targeted. Between October 2013 and February 2016, the FBI has been informed of 17,642 victims of these attacks. Over $2.3 billion in losses have been reported.

However, recently the situation has become dire. There has been a 270% increase in business email scams since January 2015, and the amounts lost in each successful attack are substantial. FBI reports that in Arizona the typical transfers requested are between £$25,000 and $75,000. With such high rewards for criminals it is no surprise that so many attacks are being conducted.

The FBI has urged companies to exercise caution and to be on high alert for these business email scams. The advice provided is to be extremely wary of any email-only request for a wire transfer, even if it comes from within the company.

To prevent these attacks, accounts department staff should verify a transfer request with the individual by phone – never by email – and should check the email address of the sender carefully. Multi-level authentication of bank transfers should also be consider3ed to reduce the risk of a successful attack.