Technology has drastically changed the way we transact. Thanks to innovations such as wire transfer, transactions are faster, smoother, and more accessible, but there’s a caveat. Wire transfers are increasingly coming under threat from malicious actors operating in digital spaces.
Cybercriminals like this payments channel for the same reasons as businesses and their clients do. For instance, it only takes a few minutes to initiate a wire transfer and the funds are usually in the recipient’s account and ready for immediate withdrawal within a few hours. Also, there’s no limit on the amount of wire.
Over the years, cybercriminals have continued to successfully misdirect wire transfers by scamming businesses into authorizing illegal transactions. The fast pace of transactions, no limit on the amounts involved, and quick fund availability make wire transfers an easy target for bad actors. Wire fraud is rampant across the country, and Wichita businesses have not been spared.
In this article, we look at some of the tricks cybercriminals use to scam business owners and their employees into inadvertently helping them in committing wire fraud and general approaches to help Wichita businesses combat the threat.
When it comes to committing wire fraud, modern cybercriminals have quite a few tricks up their sleeves. The approach that the criminal chooses to employ depends on their skill level, sophistication, and available resources. However, wire fraud mostly involves email. Here are some of the most common tactics cybercriminals use to commit wire fraud.
What’s in your inbox? There could be some dangerous emails from fraudsters trying to convince you to send money to them via wire transfer, all while masquerading as a trusted partner or authority figure. This practice is referred to as email spoofing. Email spoofing is one of the most common tricks that cybercriminals use to carry out wire fraud.
How Email Spoofing Works
The first step is finding out who can authorize a wire transfer. Usually, the attackers will piece together the hierarchy of the company using social media, company website, and other public information. Any employee who can authorize or execute accounts payable operations, including corporate finance employees, human resources, and corporate executives can be a target.
Once the attackers know which employees can authorize or execute a wire transfer, the next step is compromising their email. There are two ways to go about it. Criminals can take control of an employee’s email through hacking or malware. The other option is to create a fake email that’s nearly identical to that of the target employee.
Using the compromised or fake email, the criminals send an email to someone at the company and instruct them to initiate a wire transfer to a designated account. Since the email seems to come from a trusted source, the individual will act on the request and email wire payment instructions to the bank. The bank will subsequently wire the funds to the criminals.
Phishing is another common tactic fraudsters use to misdirect wire transfers. Usually, attackers use phishing tactics to gather the information they need to commit wire fraud. Phishing uses emails purporting to be from legitimate sources to extract information. Fraudsters are highly adept at using technology to trick individuals into sharing confidential information.
While the terms ‘spoofing’ and ‘phishing’ are very often used interchangeably, they have two different meanings. Spoofing seeks to steal or disguise an identity so illicit activity can ensue. Phishing, on the other hand, aims to take hold of sensitive information by convincing the victim to provide it directly.
When it comes to wire fraud, both tactics use disguise and misrepresentation to scam business owners and their employees into executing or authorizing fraudulent transactions.
It’s very difficult to recover funds lost via wire fraud. Since the wired funds are good when sent, the receiving bank settles the wire immediately. It’s also important to note that the vast majority of fraudulent wire transfer requests are sent on Friday, which gives the criminals time to withdraw the money before the company takes any action.
It’s also very difficult for authorities to retrace the money laundering process since the criminals move the stolen funds to banking systems that provide legal protections for the account holder’s identity and banking activity.
Fraudulent wire transfers cost businesses millions of dollars each year from victims and continue to plague the internet through various tactics. Fortunately, there are steps you can take to protect your employees and clients from wire fraud.
Cybercriminals will continue their efforts to misdirect wire transfers as long as banks offer their clients the ability to wire funds. The best thing Wichita businesses can do is take steps to minimize the chances of wire fraud. Working with an IT security provider such as 0neSource Technology can further protect your Wichita business from this threat.
We can help you assess the state of your vulnerability to wire fraud and help you stay ahead of emerging threats with custom-made approaches to cybersecurity. Call us today for more information.