Southfield, MI – September 26, 2019 – An in-depth investigative study by Better Business Bureau (BBB) finds that business email compromise scams are skyrocketing in frequency and have cost businesses and other organizations more than $3 billion since 2016.
Business email compromise fraud is an email phishing scam that typically targets people who pay bills in businesses, government and nonprofit organizations. It affects both big and small organizations, and it has resulted in more losses than any other type of fraud in the U.S., according to the Federal Bureau of Investigations (FBI).
The investigative study – “Is That Email Really From ‘The Boss?’ The Explosion of Business Email Compromise (BEC) Scams” – looks at the prevalence of BEC scams and the criminal systems that perpetrate them. It digs into the scope of the problem, who is behind it, the multi-pronged fight to stop it and the steps consumers can take to avoid it. Read the full study atbbb.org/becstudy.
BEC fraud takes many forms, but in essence, the scammer poses as a reliable source who sends an email from a spoofed or hacked account to an accountant or chief financial officer (CFO), asking them to wire money, buy gift cards or send personal information, often for a plausible reason. If money is sent, it goes into an account controlled by the con artist.
The FBI recognizes at least six types of activity as BEC or email account compromise (EAC) fraud, which differ based on who appears to be the email sender – a chief executive officer (CEO) asking the CFO to wire money to someone, a vendor or supplier requesting a change in invoice payment, executives requesting copies of employee tax information, senior employees seeking to have their pay deposited into a new bank account, an employer or clergyman asking the recipient to buy gift cards on their behalf, even a realtor or title company redirecting proceeds from a real estate sale into a new account. These targeted email phishing scams are sometimes called “spear phishing.”
This serious and growing fraud has tripled over the last three years, jumping 50% in the first three months of 2018 compared to the same period in 2017. In 2018, 80% of businesses received at least one of these emails. From 2016 through May 2019, the Internet Crime Complaint Center (IC3) received 58,571 complaints on BEC fraud, with reported losses in the U.S. totaling $3.1 billion. BBB’s report finds that the average BEC loss involving wire transfers is $35,000, while the average loss involving gift cards is $1,000 to $2,000. However, the cost to businesses can be much higher: Google and Facebook lost more than $100 million to BEC fraud before the perpetrator was arrested in 2017.
BBB® Serving Eastern Michigan & the Upper Peninsula was the target of a BEC scam earlier this year. An employee received an email from someone claiming to be Melanie Duquesnel, BBB President & CEO. Ms. Duquesnel was at a conference out of state during the time of the email making it possible to believe it could be from her. The employee texted Ms. Duquesnel who confirmed that the email was in fact a scam.