Protecting your business from financial fraud has become more critical than ever before, with all too frequent reports of unsuspecting businesses falling victim to criminals. CEO fraud and invoice fraud are two common types of scams that have cost small firms in Ireland millions of euros. The Banking and Payments Federation Ireland (BPFI) via FraudSMART reports that in 2022 alone, small businesses in Ireland were conned out of €8m as a result of these scams, highlighting the need for business owners to educate themselves and their employees on how to avoid falling victim to these fraudulent activities.
What is CEO Fraud?
CEO fraud is a type of phishing scam where cybercriminals impersonate a CEO or senior executive of a company to trick employees into transferring funds to an unauthorised bank account. The scammer usually sends an email to an employee in the finance department, asking them to urgently transfer money to an account they claim is for a confidential business transaction. The request that you believe to originate from your boss may say that he’s busy or running into an urgent meeting and demand the payment be made straight away, leaving the employee to feel that they would be in trouble if they didn’t carry out the demand from their boss.
The email may appear genuine, with the correct email address and even the company logo, making it difficult for employees to suspect anything is amiss. To add to the deception, the email may also come from an email address that is very similar to the CEO’s email, with just a slight variation in the spelling. This type of scam can result in significant financial losses for a business, and it’s crucial to take steps to prevent it from happening. CEO fraud has been circulating for a number of years now and gained a lot of media attention in Ireland back in 2016 when Meath County Council reported that they were tricked into paying €4.3m in an apparent CEO fraud scam.
How to Prevent CEO Fraud?
One of the most effective ways to prevent CEO fraud is to educate employees on how to recognise and respond to these types of scams. This can include training employees to verify any unusual or suspicious requests made by email or phone before transferring any funds. It’s also essential to establish robust procedures for authorising and verifying payments to ensure that employees don’t fall victim to fraudsters. It has been found that while not foolproof simply including certain keywords or trigger words (changed regularly) in all requests for payments to external parties can help prevent your company from falling victim.
Another critical step in preventing CEO fraud is to implement strong email security measures, such as multi-factor authentication, to ensure that only authorised personnel have access to company email accounts. Implementing secure communication protocols, such as encrypted emails, can also help prevent unauthorised access to sensitive information.
What is Invoice Fraud?
Invoice fraud is another type of scam that is becoming increasingly common, where fraudsters pose as suppliers or service providers to trick businesses into paying fake invoices. These scammers often target businesses that work with numerous suppliers, making it easier to slip a fake invoice through the payment process.
The fraudsters may impersonate a genuine supplier, using the same logo and contact details, and may even copy the format of a genuine invoice. The fake invoice may be for a small amount, making it less likely to raise suspicion, but if left unchecked, these scams can result in significant financial losses for businesses.
How to Prevent Invoice Fraud?
Preventing invoice fraud requires a multi-pronged approach, including implementing robust processes for verifying and authorising payments. For example, businesses can establish a system of checks and balances to ensure that all invoices are reviewed and approved before payment is made. It’s also essential to have a process in place for verifying the identity of suppliers and service providers to ensure that they are legitimate.
Criminals will continue to target your business with a variety of attack methods, however, email remains the number one threat vector. Most attacks, whether it be CEO or Invoice Fraud as discussed here or a ransomware attack that locks down your system and steals your data, originate from your inbox. Your approach to your cyber defence should be multi-layered with a variety of effective tools to mitigate the risks. You can download or free PDF on how to protect your business by going to the resources page of the IT.ie website or if you trust the link click HERE.
There really isn’t 100% guarantee of protection and depending on the tools you employ; you can greatly mitigate the risks. Criminals will continue to look for points of entry to your inbox and once inside, your last and most important line of defence is the person sitting in front of the screen. Your employees are your best defence when cyber aware and potentially your greatest risk, when not. Criminals want you to take an action, be it clicking on a link or making a payment and building a culture of cyber awareness at your company is potentially the most important step in your multi-layered approach. Cyber Awareness Training is proving increasingly popular with businesses of all sizes who want to build a culture of cyber awareness at their organisation.
At IT.ie we provide the complete solution for Human Risk Management with Cyber Awareness Training and Simulated Phishing Campaigns. This system is fully automated with training delivered in bite-sized training modules and tailored for each user from their initial gap analysis questionnaire and engagements with the various phishing simulation. You can find out more about our cyber awareness solution by visiting our website or just clicking HERE.