What is social engineering fraud?
It is a confidence scheme that intentionally misleads an employee into sending money or diverting a payment based on fraudulent information that is provided to the employee in a written or verbal communication such as an email, fax or phone call.
How does this happen?
If you think this won’t happen to your organization… think again. This surprisingly successful fraud happens every day to unsuspecting employees with the receipt of a message that appears to be from a legitimate vendor, client, internal employee or authorized person that contains a variety of misleading requests and information. In many cases, the fraudster has infiltrated an email conversation and has been able to obtain a copy of a signature section to make the fraudulent message appear even more legitimate. Some messages even amend the phone numbers in the email panel, so a call back to the phone number is directed to the fraudster, who will of course verify the information.
How often does this happen?
Targeted attacks on businesses have increased 55% in 2015 and it has been reported that there are over 100,000 affected by social engineering attacks each day.
How to protect your business?
Even well-managed businesses with proven best practices of employee training, partner background screenings and financial checks can be infiltrated. Fraudsters can gain the confidence of an employee by posing as a vendor, client, employee or authorized person and instruct him or her to transfer or divert money. Most companies do not even realize a deception has occurred until they are notified by the real recipient who never received a legitimate payment. Once discovered it can be too late to stop the fraudster’s theft. Therefore it is important to understand the threat and be prepared to protect your business from serious financial loss. An insurance policy that covered Fidelity and Crime can extend coverage to include social engineering fraud.
