Part I: Understanding CEO Fraud

What is CEO Fraud?   The FBI calls it Business Email Compromise and defines BEC as “a sophisticated scam targeting businesses  working with foreign suppliers and/or businesses that regularly perform wire transfer payments.

The scam is carried out by compromising legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.”

CEO fraud is another name for this scam and it usually involves tricking someone into making a large wire transfer into what turns out to be a bogus account. On a few occasions, however, checks are used instead of wire transfers. According to resent FBI reports in the last year estimate losses have hit 2.3 billion dollars.

Most victims are in the US (all 50 states), but companies in 100 other countries have also reported incidents. While the fraudulent transfers have been sent to 79 countries, most end up in China and Hong Kong. Unless the fraud is spotted within 24 hours, the chances of recovery are small.

That’s why only 4% of the funds are ever retrieved. Certainly, large enterprises are a lucrative target. But small businesses are just as likely to be the mark. Other than being a business that engages in wire transfers, there is no discernible pattern in terms of a focus on a particular sector or type of business. The bad guys don’t discriminate!

Next week the methods of how CEO attacks are initiated ~ Think Before You Click!

Tina Louise ~ www.cloudplusservices.com ~ 888.871.6584

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