caution_computer_crime_scam_internet

EY’s Fraud Investigation and Dispute Services group has issued a warning about a recent wire transfer scam that has impacted several companies.

Most have avoided major damages, but some companies have lost up to $5 million after employees received and acted on fraudulent emails that requested they complete wire transfers for high-level executives.

Read: Don’t fall for FATCA scams, warns IRS

In most cases, the exchange follows the below pattern.

  1. An employee receives emails from an individual impersonating an executive of their company, typically the CFO or CEO.
  2. The emails have been generally well written and plausible. They appear consistent with company emails, and may even come from a domain name set up to look similar to the corporate email address, only with an added letter. For example, @institute.com might appear as @instiitute.com.
  3. The requests include instructions on where to wire money to cover an urgent business transaction, such as an acquisition. The transfer is usually to a foreign location and in foreign funds.
  4. The perpetrator sometimes requests the transaction remain confidential, and states that the employee is trusted with the information.
  5. The emails often include an attachment with beneficiary account details, and some include what appears to be an invoice from a supplier.
  6. On occasion, the transfer request may be made or reinforced by a telephone call from an individual impersonating the company executive or advisor.

To avoid losses, business owners can follow these steps:

  • Notify treasury and finance staff about the scam, so they know what to look for.
  • Require the use of business email accounts for correspondence on payment instructions and prohibit the use of personal emails.
  • Implement an acknowledgement procedure, in which staff members are expected to forward the email to the executive to confirm receipt of instruction.
  • Implement additional procedures around high-risk payments with numerous red flags.

Read:

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Originally published on Advisor.ca

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