What Is Business Email Compromise (BEC)?

Business Email Compromise (BEC) is a clever phishing email scam that typically targets employees of companies who regularly send wire transfers to their partners.

Occasionally referred to as Man-in-the-Email, Business Email Compromise uses spoofed or compromised email accounts to trick email recipients into providing company information, sending money, or sharing company innovations and technology.

BEC is a social engineering technique that relies on winning the trust of the email recipient. The cyber criminals behind these scams know that most people don't scrutinize sender email addresses or notice slight URL discrepancies.

Along with familiar, urgent, and strategic email wording, these techniques make it very difficult for company employees to quickly and effortlessly recognize BEC threats.

BEC cyber criminals use phishing, spear phishing, and social engineering to impersonate company executives, accounting departments of foreign partners, and other senior members of the company.

How Common is BEC?

According to the FBI's Internet Crimes Complaint Center (IC3) division, BEC crimes were the costliest cyber threat of 2020, with adjusted losses estimated at $1.8 billion overall. The Verizon Data Breach Investigations Report 2021 tells a similar story, slotting BEC as the second-riskiest data breach driver in 2020, riding the wave of rampant brand impersonation schemes, especially on social media.

Similarly, the Canadian Anti-Fraud Centre (CAFC) received reports of almost $30 million in 2020 BEC losses. The total for 2021 is estimated to be much higher, with over $26 million in losses reported during the first half of the calendar year alone.

The above statistics reinforce how prevalent and dangerous BEC attacks are to companies and the individuals who are tricked into giving up money, company information, and technology. The IC3 division recommends that company employees remain suspicious of email requests for secrecy or pressure to act quickly.

Security awareness training and continuous education are vital in reinforcing the importance of being cyber aware of emails and the inbox.

What Are The 5 Types Of BEC Scams?

There are five types of BEC scams that you need to be aware of:

Bogus Invoice Scheme

Using malware or another phishing technique, the cyber criminal infiltrates the company's email system. The cyber criminal then takes over an employee email account typically used to request invoice payments and fund transfers.

The cyber criminal emails the compromised account asking another employee to transfer funds or make an invoice payment to a specific account. Often the email is written with an urgent tone. The targeted employee trusts the email sender and inadvertently sends funds to a fraudulent account connected to the cyber criminal.

CEO Fraud

The cyber criminal spoofs a company executive's email account and then uses this identification to steal from the company. Typically, the spoofed email account will be slightly different from the actual account – for example, [email protected] instead of [email protected]

Using this email address and identity, the cyber criminal sends an email with a subject line and message requesting an urgent money transfer. The email recipient trusts the sender and does not feel compelled to double-check the email address for accuracy. The email recipient sends the funds as asked and doesn't think to verify the bank name or company name associated with the transfer.

Account Compromise

Using savvy phishing techniques, an employee's account is hacked. The cyber criminal mines the employee's contact list for company vendors, partners, and suppliers. Emails are then sent from the hacked account to these critical contacts requesting payments be sent to a fake account controlled by the cyber criminal.

Attorney Impersonation

A cyber criminal, posing as a lawyer acting on behalf of a client, contacts company employees or the CEO. The perpetrator makes it clear that this email conversation is time-sensitive and should be kept confidential. Feeling under pressure and believing they're doing the right thing, the BEC victim sends the requested funds.

Savvy cyber criminals often use this BEC scheme on a Friday afternoon or before the start of a holiday when they know the email recipient is rushing to get work done.

Data Theft

The cyber criminal takes over the company email of one or more human resources team members. These email addresses are used to send requests for confidential information about employees, the company, partners, and investors. The cyber criminal later uses this data as part of a more significant BEC attack or a more advanced cyber attack against the company.

These BEC schemes underscore the importance of providing company employees with security awareness education and knowledge that reinforces the importance of paying attention to email addresses, company names, and requests with even a hint of suspicion.

How Does BEC Happen?

Because of the nature of the crime, a BEC attack requires a strategic and thorough approach.

1. The cyber criminal spends time researching the target company. The criminal uses publicly available information such as press releases, LinkedIn profiles, website content, and social media posts to collect the names and titles of key company personnel.

Some cyber criminals go so far as looking for travel plans, conference attendance details, company partners and investors, new product information, and basic facts about the company.

2. Using this information, the cyber criminal then either hacks the company email system using a phishing technique or spoofs an email account of a key employee.

3. Once inside the company, the cyber criminal uses this email access and the information they've collected about the company to send targeted, familiar, and urgent emails to employees who the criminal believes will respond accordingly.

4. Unsuspecting employees receive emails from the cyber criminal masquerading as a colleague, lawyer, or company partner requesting a payment, fund transfer, or confidential information.

5. Because the email address is familiar and the request is not out-of-the-ordinary, the innocent employee doesn't think twice and does precisely as the cyber criminal requests. Typically, the employee believes they’re acting in the company's best interest by paying an overdue invoice or transferring funds to a new company partner.

It's important to remember that BEC schemes rely on savvy social engineering techniques and the human element of trust.

Phishing simulations allow you to identify which employees are prone to BEC scams and phishing attacks, demonstrating how easy it is for cyber security attacks like BEC to happen.

How To Prevent BEC Attacks

To prevent BEC attacks, do the following:

1.

Educate your employees about the five types of BEC attacks. Take advantage of free phishing simulation tools to educate and identify BEC and phishing risks.

2.

Use proven security awareness training and phishing simulation platforms to keep employees' BEC and social engineering risks top of mind. Create internal cyber security heroes committed to keeping your organization cyber secure.

3.

Remind your security leaders and cyber security heroes to regularly monitor employee BEC and phishing awareness with phishing simulation tools. Take advantage of BEC microlearning modules to educate, train, and change behavior.

4.

Provide ongoing communication and campaigns about cyber security, BEC, and social engineering. This includes establishing strong password policies and reminding employees about the risks that can come in the format of emails, URLs, and attachments.

5.

Establish network access rules that limit the use of personal devices and the sharing of information outside of your corporate network.

6.

Ensure that all applications, operating systems, network tools, and internal software are up-to-date and secure. Install malware protection and anti-spam software.

7.

Incorporate cyber security awareness campaigns, training, support, education, and project management into your corporate culture.

Watch the following video about preventing BEC with security awareness and phishing simulations to understand how easy it is for anyone to become a victim of a BEC scam.

Phishing simulation is the best way to raise awareness of BEC risks and identify which employees are at risk for BEC scams and phishing.

BEC relies on phishing techniques to access the company email system and uses social engineering techniques to convince employees to act as requested.

Phishing simulation lets you easily incorporate cyber security awareness training into your organization in an interactive and informative format.

People see first-hand how personalized trustworthy emails are used to steal personal and corporate information. Real-time BEC and phishing simulations are ideal for any organization to educate people and increase alertness levels to BEC schemes and techniques.

How Can Phishing Simulations Help Prevent BEC?

Phishing simulations allow you to show employees in real-time how easy it is to fall victim to a BEC attack.

Using real-world examples and sophisticated phishing simulations, employees realize why it is essential to verify email addresses and to confirm requests for funds or confidential information before acting.

Phishing simulations give your organization these top 10 benefits in the defense against BEC scams and other cyber security threats:

1. Measure the degrees of corporate and employee vulnerability

2. Eliminate the cyber threat risk level

3. Increase user alertness to BEC and phishing risk

4. Instill a cyber security culture and create cyber security heroes

5. Change behavior to eliminate the automatic trust response

6. Deploy targeted anti-phishing solutions

7. Protect valuable corporate and personal data

8. Meet industry compliance obligations

9. Assess the impacts of cyber security awareness training

10. Segment BEC and phishing simulation

To learn more about BEC and how you can keep your organization cyber secure, take advantage of our free cyber security awareness resources: