The Federal Bureau of Investigation (FBI) is warning businesses about a sophisticated email scheme that has resulted in $1.2 billion in losses worldwide. In the United States, scammers defrauded more than 7,000 companies between October 2013 and August 2015.
The Business Email Compromise – or BEC scam – typically targets businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. The perpetrators compromise legitimate business e-mail accounts by utilizing social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.
Increased volume of BEC scams
The FBI last alerted businesses about the so-called BEC scam at the beginning of the year. The agency is sounding the alarm again because there has been a staggering 270 percent increase in identified victims and exposed loss since January 2015. “The scam has been reported in all 50 states and in 79 countries,” the FBI alert states. “Fraudulent transfers have been reported going to 72 countries; however, the majority of the transfers are going to Asian banks located within China and Hong Kong.”
While the BEC scam can take a variety of forms, the FBI’s latest alert highlights an increasingly common variety that involves fraudsters identifying themselves as lawyers or law firm representatives. The scammers contact victim businesses by phone or email and claim to be handling confidential or time-sensitive matters. According to the FBI, the perpetrators pressure victims to act quickly or secretly in arranging the transfer of funds. Additionally, the fraud may be timed to occur at the end of the business day or work week or to coincide with the close of business of international banks or other financial institutions.
Steps to take in BEC scam defense
To defend against BEC scams, the FBI recommends that businesses adopt cybersecurity and data protection measures, including:
Create intrusion detection system rules that flag e-mails with extensions that are similar to (but not exactly matching) company e-mail.
Register all company domains that are slightly different than the actual company domain.
Confirm changes in vendor payment location by adding additional two-factor authentication such as having a secondary sign- off by company personnel.
Authenticate requests for transfers of funds. When using phone verification as part of the two-factor authentication, use previously known numbers, not the numbers provided in the e-mail request.
Know the habits of your customers, including the details of, reasons behind, and amount of payments.
Carefully scrutinize all e-mail requests for transfer of funds to determine if the requests are out of the ordinary.
Crypto Investor Protection: SEC and CFTC Enforcement Trends
Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]
New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters
A Settled Regulatory Environment Enables Confident Capital Planning New Jersey’s new manufacturing incentive program, Next New Jersey Manufacturing Program, enters 2026 with something uncommon in economic development these days: policy stability. The statute is enacted, New Jersey Economic Development Authority’s (“NJEDA”) rules are adopted, and the application portal is open. With the election outcome settled, […]
When done successfully, industry roll-up acquisitions can dramatically grow and strengthen your business. In this post, we break down what an industry roll-up is, why companies pursue it, and what makes it an effective (and sometimes risky) business strategy. What Is an Industry Roll-Up Acquisition? In an industry roll-up acquisition of companies, a buyer acquires multiple companies […]
Genesis Mission: How the U.S. Government’s New AI Platform Will Reshape Corporate Innovation, Risk, and Competition
The federal government has launched one of the most ambitious scientific initiatives in decades, and it will redefine how companies develop technology, manage risk, and compete. The Genesis Mission, created by Executive Order and driven by the Department of Energy (“DOE”), is intended to accelerate scientific discovery through a national AI platform that links supercomputers, […]
Stablecoins and the GENIUS Act: How New Global Rules Are Reshaping Compliance
Stablecoins Leave the Grey Zone Stablecoins were supposed to be the “boring” part of crypto: digital dollars that just work. Yet for years they have lived in a regulatory no-man’s-land, classified one day as securities, the next as commodities, and sometimes as something regulators had not even named yet. That uncertainty is finally starting to […]
Don’t Overlook the Importance of Business License Management
If you operate a business without the proper license, you risk fines, insurance issues, reputational harm, and even business closure. Even innocent mistakes, like forgetting to renew a license, can have significant consequences, such as losing your lawsuit for payment of services that are unlicensed, which makes it imperative to have business license management procedures […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
