CALGARY – A new report, published by the Better Business Bureau, say more and more fraudsters are choosing to impersonate high-ranking members of organizations in North America, a scheme that's already cost companies $3.4 billion since 2016.
CEO frauds, better known as business email compromise (BEC) scams, is a phishing scam that typically targets those employees in organizations who pay bills.
The scammers often use a hacked or 'spoofed' address to pose as a senior member of the organization, instructing the receiver to wire money or share personal information with the suspect.
The report says the scam often manifests in six different forms:
- The CEO directing the CFO to wire money to someone
- Vendors or suppliers asking for a payment to be forwarded to a different bank account
- Executives requesting copies of employee tax information
- Realtors, title companies or lawyers redirecting proceeds from the sales of homes or other property into different accounts
- Senior employees asking to have their payroll deposited into a new account
- An employer or clergyman asking a sender to buy gift cards on their behalf
The Better Business Bureau says BEC scams, by choosing the unique tactic of masquerading as members of both small and large organizations, are much more successful for fraudsters and therefore have become their weapon of choice.
According to the FBI's Internet Crime Complaint Center, there have been over 58,000 complaints of BEC fraud in the United States since 2016 and over 1,200 in Canada. The reported losses in that time have been $3.1 billion and $33.6 million respectively.
BEC fraud is also a problem outside Canada and the U.S., the BBB says, as losses in Australia in 2018 were over $60 million, a 170 per cent increase over the amount lost in 2017.
While there are no statistics specific to this kind of fraud occurring in Alberta, officials say it's still very important for businesses to be aware of the danger, especially considering reports of recent losses.
"A part of the purpose of the study is to create awareness of this scam and ways that businesses can avoid being caught," said Shawna-Kay Thomas, external communications specialist for the BBB Serving Southern Alberta and East Kootenay.
"We still struggle with getting more people to report when they have been scammed, especially one of this nature where the impact and losses are usually high. Businesses may be more inclined to go to the police."
The report says at least 90 people have been arrested or charged in connection with BEC frauds in the United States over the past three years.
There is a broad consensus among police that 90 per cent of the organizations that perpetrate the schemes operate out of Nigeria.
If an organization finds it has been a victim of a BEC fraud, the BBB advises employers to immediately contact their bank to put a stop to the payment and report it to authorities, either the FBI in the U.S. or the Canadian Anti-Fraud Centre.
Usually, when the report is filed within 48 hours, there is a stronger chance the money can be recovered.
Companies are also encouraged to report the incident to the BBB Scam Tracker.
