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The Financial Crimes Enforcement Network (FinCEN) released a new report about Business Email Compromise (BEC). It shares data from January, 2016 through December, 2018.

The most important observation is the problem continues to increase. Business email compromise fraud attempts doubled between 2016 and 2018. In addition, the amount of money fraudsters attempted to steal increased threefold.

“The number of suspicious activity reports (SARs) describing business email compromise (BEC) incidents reported monthly has grown rapidly, averaging nearly 500 per month in 2016, and above 1,100 per month in 2018,” the report said. “The total value of attempted BEC thefts, as reported in SARs, climbed to an average of $301 million per month in 2018 from only $110 million per month in 2016.”

The report also states that due to the size of the threat, companies should take measures to take detecting account takeover fraud seriously. Increased collaboration in the private sector is cited as one possible solution.

Fraudsters Adapt, Change Business Email Compromise Methodologies

The report also highlights changes in fraudster techniques. In 2016, the most prominent type of business email compromise attack was attempts to impersonate execute staff. By December of 2018, fraudsters made only one-third as many attempts. FinCEN analysts attribute this to increased public awareness.

Fraudsters adapted by adopting new tactics. Fraudulent invoices became the most prominent business email compromise method by the end of 2018. In fact, the average attempted theft by fraudulent invoice was 125,439. In contrast, the average amount of an attempt to impersonate an executive was just $50,373.

Trends in scam typology indicate that BEC actors are likely changing methods as awareness of their schemes evolves, and new scams emerge. The most frequently used BEC methodology in our 2017 sample involved fraudulent emails impersonating the CEO or president of a company (33 percent), but it declined to 12 percent in 2018, likely due to awareness of such schemes in the business community,” the report said. “Fraudulent vendor or client invoices were 30 percent of incidents in 2017, and grew to 39 percent in 2018, becoming the most common BEC method.”

Construction & Manufacturing Industries Targeted

The report also discusses the frequency of attacks by industry. Construction and manufacturing firms were most frequently targeted. Together, 1 in 5 business email compromise scams targeted either the construction or manufacturing industries.

Other industries targeted include commerce services (20%), commercial services (18%), and real estate (16%). The report also examines the rate of attacks in the Financial Services (8%), Transportation (7%), and Information Technology (6%) sectors.

In conjunction with the industry data released in the report, FinCEN also released an advisory specifically to the banking industry. The warning reminds banks to remain vigilant, and reaffirms the agency’s commitment to spreading awareness and helping businesses protect themselves.


Sources:

https://www.fincen.gov/sites/default/files/shared/FinCEN_Financial_Trend_Analysis_FINAL_508.pdf

https://www.fincen.gov/sites/default/files/advisory/2019-07-16/Updated%20BEC%20Advisory%20FINAL%20508.pdf

https://bankingjournal.aba.com/2019/07/fincen-warns-banks-of-business-email-compromise-scams/

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