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Money Transfer Scams Target Both Businesses And Consumers

Money transfer scams, also called wire transfer scams, target both businesses and consumers. The affected firms include both small and large businesses.

Businesses

The Federal Bureau of Investigation (FBI) calls theses scams "Business E-mail Compromise" (BEC), since the fraudsters often target executives within a company with phishing e-mails, designed to trick victims into revealing sensitive bank account and sign-in credentials (e.g., usernames, passwords):

"At its heart, BEC relies on the oldest trick in the con artist’s handbook: deception. But the level of sophistication in this multifaceted global fraud is unprecedented... Carried out by transnational criminal organizations that employ lawyers, linguists, hackers, and social engineers, BEC can take a variety of forms. But in just about every case, the scammers target employees with access to company finances and trick them into making wire transfers to bank accounts thought to belong to trusted partners—except the money ends up in accounts controlled by the criminals."

From January, 2015 to February 2017, there was a 1,300 percent increase in financial losses due to these scams, totaling $3 billion. To trick victims, criminals use a variety of online methods including spear-phishing, social engineering, identity theft, e-mail spoofing, and the use of malware. (If these terms are unfamiliar, then you probably don't know enough to protect yourself.) Malware, or computer viruses, are often embedded in documents attached to e-mail messages -- another reason not to open e-mail attachments from strangers.

Forbes Magazine reported in April:

"Fraudsters target the CEO's and CFO's at various companies and hack their computers. They collect enough information to learn the types of billing the company pays, who the payee's are and the average balances paid. They then spoof a customer or, in other words, take their identity, and bill the company with wire transfer instructions to a scam bank account."

Some criminals are particularly crafty, by pretending to be a valid customer, client or vendor; and use a slightly altered sender's e-mail address hoping the victim won't to notice. This technique is successful more often that you might think. Example: a valid sender's e-mail address might be johnson@XYZcompany.com, while the scammer uses johnson@XYZcompamy.com. Did you spot the alteration? If you didn't, then you've just wired money directly to the criminal's offshore account instead of to a valid customer, client, or vendor.

Scammers can obtain executives' e-mail addresses and information from unprotected pages on social networking sites and/or data breaches. So, the data breaches at Under Armour, Equifax, Fresenius, Uber, the Chicago Board of Elections, Yahoo, Nationwide, Verizon, and others could have easily provided criminals with plenty of stolen personal data to do plenty of damage; impersonating coworkers, business associates, and/or coworkers. Much of the stolen information is resold by criminals to other criminals. Trading stolen data is what many cyber criminals do.

There are several things executives can do to protect themselves and their business' money. Learn to recognize money transfer scams and phishing e-mails. Often, bogus e-mails or text messages contain spelling errors (e.g., in the message body) and/or contain a request to wire immediately an unusually large amount of money. Most importantly, the FBI recommends:

"The best way to avoid being exploited is to verify the authenticity of requests to send money by walking into the CEO’s office or speaking to him or her directly on the phone. Don’t rely on e-mail alone."

That means don't rely upon text messages either.

Consumers

Wiring money is like sending cash. To avoid losing money, it is important for consumers to learn to recognize money transfer scams, too. There are several versions, according to the U.S. Federal Trade Commission (FTC):

"1. You just won a prize but you have to pay fees to get the prize
2. You need to pay for something you just bought online before they send it
3. A friend is in trouble and needs your help
4. You got a check for too much money and you need to send back the extra"

Regular readers of this blog are already familiar with #4 -- also called "check scams." Instead of paper checks, scammers have upgraded to prepaid cards and/or wire transfers. The FTC also advises consumers to pause before doing anything, and then:

  • "If the person claims (via e-mail) to need money for an emergency, call them first. Call another family member. Verify first if something truly happened.
  • If the check received is too much money, call your bank before you deposit the check.  Ask your bank what they think about wiring money back to someone.
  • If the e-mail or phone caller says you received an inheritance or prize, "you do not have to pay for a prize. Ever.  Did they say you have an inheritance? Talk to someone you trust. What does that person think?"

If you have already sent money to a scammer, it's gone and you probably won't get it back. So, file a complaint with the FTC. Chances are the scammer will contact you again, since they (or their associates) were successful already. Don't give them any more money.

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