A 17-year-old from Florida stole $117,000 with a clever cyber fraud. He took control of several public figures’ Twitter profiles and convinced their followers to wire him cryptocurrency. When they target corporations, cyber attacks can lead to even bigger financial (and reputational) losses. Keep reading to learn how you can effectively protect your company against this unprecedented threat.
Trustpair blocks any financial effect of cyber fraud by continuously controlling payments before they’re executed. Any suspicious payment to an unknown third party is blocked. Contact an expert to learn more!
What is cyber fraud?
Cyber fraud is an Internet fraud, a kind of cyber crime that aims to steal money (or other valuable assets) from an entity. It involves using online solutions to commit fraud.
With the development of the Internet and online banking solutions, cybercriminals’ schemes have been evolving and becoming increasingly elaborate. They use identity theft, phishing, and other types of social engineering attacks to reach their goals.
In a typical corporate fraud scenario, perpetrators contact a member of your company under false pretenses to get them to:
- Reveal confidential information,
- Wire funds to their accounts.
Cyber fraud often happens in various steps. For example, they’ll first steal login credentials from an employee and then proceed to use them to access your business bank account and transfer funds.
What are the main types of cyberfraud?
Phishing
Phishing attacks are considered a priority threat by security experts. They always seem to be on the rise, with individuals and corporations alike being targeted. The Federal Trade Commission even published some phishing protection guidelines to warn people against them.
In phishing scams, scammers trick their victim into committing an action they wouldn’t consent to under normal circumstances, such as:
- Revealing personal information (like their login information),
- Giving sensitive data about your business (like your credit card numbers, or payroll info),
- Downloading malware hidden in attachments or on counterfeit websites.
Phishing emails often include too-good-to-be-true offers to lure their recipients into clicking the links they contain. Phishers also use other forms of communication for their scams, like:
- Vishing (phishing over the phone)
- Smishing (phishing by text messages)
Pharming
Pharming comes from the mix of “phishing” and “farming”. Pharmers, as the perpetrators of this kind of cyberattack are called, use false pretenses to harvest confidential information.
In pharming attacks (learn more about pharming attacks right here), cybercriminals use spoofing to create websites that collect important data — login credentials, financial information, etc…
When their victims land on their legitimate-looking websites, they try to log in as usual, only to see an error message displayed once they’ve entered their login information.
Although the website looks legitimate, it’s actually a copy pharmers made that’s hosted on their own servers, and is automatically collecting their personal data. Hackers will then be able to reuse the information harvested on a real website, like the one of a financial institution.
Malware
Malware is a type of software that is used for malicious purposes — hence the name.
Internet users are prompted to download it under false pretenses. Ironically, they’re often told there is a security breach in their antivirus software and an urgent update is required.
When installed on a device, malware can damage its operating system, or access confidential data. It can lead to your whole network being compromised.
Spyware is a variation that does espionage for its owner. The software copies and scraps the data present on a device (or network!) and sends it back to its sender. This information can then be used for committing wire transfer scams, or be sold on the dark web.
Ransomware on the other hand seizes control of your device or data and asks for a ransom in exchange for giving you back access to your own assets.
Business Email Compromise
Business Email Compromise (BEC) is an elaborate kind of cybersecurity threat that targets businesses. Fraudsters contact employees under false pretenses, asking them to reveal or modify financial information that will lead to wire fraud.
Scammers often commit identity fraud, even hacking into legitimate e-mail accounts to impersonate a supplier, another employee, or even a member of the tax office. It’s considered a white-collar crime.
BEC works through a mix of social engineering tactics, putting pressure on their victims to get them to act quickly. Common BEC scams include:
- CEO fraud: someone contacts an employee pretending to be their CEO (or another high-level executive) asking to make an “urgent payment” or to send confidential data.
- Vendor fraud: fraudsters impersonate one of your suppliers and ask for their bank account details to be modified. Next time your company pays an invoice from your real supplier, funds will be sent to the criminals’.
Learn more about fraud techniques in our latest fraud report!
How can you protect your business against cyber fraud?
In 2022, 56% of US companies were targeted by at least one fraud attempt. While fraud doesn’t only happen online (paper check fraud is still widely spread), it’s essential to protect against the risks it represents.
Here are a few elements to implement in your organization to safeguard your data, money, and reputation:
Increase cyber security
Improving your cyber security reduces your risks of being a victim of cyber fraud. Our recommendation at Trustpair is to focus on both implementing enhanced measures and encouraging your teams to follow them.
Improving your security measures: encourage your employees to use strong passwords and to adopt best online practices, such as:
- Never download attachments from senders they don’t recognize.
- Always using anti-spam and anti-malware software on all their device.
- Never reveal personal information like their phone number, social security number, or other identifiable data by email or over the phone.
Becoming a cyber-secure company: security awareness training should be regularly delivered to your key employees, with regular updates and real-life examples of fraud.
Teach them to recognize phishing emails, and how to react when fraud attempts are detected (involving IT security so they can stop breaches, contacting law enforcement, etc.).
Use anti-fraud software
Internal measures are necessary, but not enough in themselves. After all, no measure is ever infallible. So, what happens when a cybercriminal manages to breach your network?
If you use anti-fraud software, nothing! Fraud prevention and detection software like Trustpair helps you neutralize the effects of cyber fraud.
Even if a hacker manages to penetrate your security defenses, they won’t be able to wire money to themselves (or change your suppliers’ credentials) without raising the alarm.
Trustpair continuously audits your third-party data before any transaction is sent, blocking any unauthorized payment. With Trustpair, you can be confident your funds transfers always reach their intended recipient. Contact an expert to learn more!
Key Takeaways:
- Cyberfraud is fraud committed online. It’s been on the rise and can take many forms.
- To protect yourself against cyber threats, you need to become a cyber-secure organization.
- We recommend using an anti-fraud solution like Trustpair to safeguard against financial fraud, a natural consequence of cyberattacks.
