Suspicious Business Emails Increase, Survey Shows
April 28, 2020
U.S. small businesses report an increase in suspicious emails over the past year, and employees are taking the bait as they fall for phishing schemes and transfer tens of thousands of dollars in company funds into fraudulent accounts, a cyber survey by HSB shows.
“Whether it’s a phishing scheme, fraud or malware, most cyber-attacks start with an email,” said Timothy Zeilman, vice president for HSB, which is a multi-line specialty insurer. “Even companies that have information security training and fairly savvy employees fall victim to these deceptions.”
Over half of business executives (58 percent) polled by Zogby Analytics for HSB, said suspicious emails had increased in the past year.
More than a third (37 percent) of the organizations received an email from someone pretending to be a senior manager or vendor requesting payments.
Almost half of employees receiving those emails (47 percent) responded by transferring company funds, resulting in losses most often in the $50,000 to $100,000 range (37 percent) and rarely less than $10,000 (only 11 percent).
The scam is convincing because cyber thieves in many cases gain access to business email accounts and assume the false identities of company managers.
With millions of Americans working remotely from home since the outbreak of COVID-19, business email schemes could become an even bigger threat, Zeilman said.
“It’s more important than ever to pay attention to safe cyber security practices and make sure you verify requests for payments,” he said. “Don’t rely on email alone—call the person and confirm the payment is legitimate before releasing any funds.”
These BEC scams often lead to wire transfer fraud. According to the FBI, there were 11,677 victims in 2019 with $221 million in losses due to wire transfer fraud. This compares to 11,300 reported victims and $150 million in losses in 2018.
“The title and settlement industry has improved its digital hygiene and implemented many procedures to combat this fraud,” said Diane Tomb, ALTA’s chief executive officer. “But no matter how much money we spend, criminals will continue to target consumers and try to take advantage of them during a crisis. This is why we must continue to educate people about how they can protect their money when purchasing a home or refinancing a mortgage.”
ALTA also recommends calling a known number instead of emailing to verify wiring instructions. It’s uncommon for title companies to change wiring instructions and payment information by email.
To raise awareness and educate consumers, ALTA launched the Coalition to Stop Real Estate Wire Fraud. In 2019, the coalition ran a digital advertising campaign placing online ads in nine markets. The campaign delivered more than 22 million ad impressions to potential homebuyers.
Tools and Resources
ALTA has developed many tools and resources to help protect raise awareness and tools to protect your operation. Click here to access the resources. In addition, the ALTA Registry can serve as an effective countermeasure to wire fraud. Make sure your company is confirmed.
Contact ALTA at 202-296-3671 or communications@alta.org.