Between Oct. 1, 2013, and Dec. 1, 2014, nearly 1,200 companies lost a total of $179 million in so-called business email compromises, a sophisticated scam targeting businesses working with foreign suppliers or businesses that regularly perform wire transfer payments, according to the FBI. Scams are carried out by compromising legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers, the bureau states in an Aug. 27 alert.
Fraudsters will use the method most commonly associated with their victim’s normal business practices such as wire transfers or checks. Although the transfers have been sent to 72 countries, the majority of them are going to Asian banks located within China and Hong Kong. Worldwide, the FBI said that the losses totaled more than $1.2 billion.
The incidence of commercial fraud is rapidly increasing in the commercial sector today. In May 2014, FBI Director James Comey stated that 1,300 of the 2,000 people hired in 2014 were assigned to combat criminal commercial fraud. According to the Association of Certified Crime Specialists, commercial fraud cybercrime rose to the top of most corporate compliance agendas in 2014.
Commercial fraud costs businesses an estimated millions of dollars each day, and the FBI reports that the instances of successful commercial fraud have increased 37% in the last several years. In July, 38 successful occurrences of commercial fraud were reported in one American city. In many companies, information technology, or compliance or governance departments have addressed fraud issues. Fraud risk, however, has been increasingly touching areas related to accounts receivables and customer payments.
An Oct. 5 webinar, “Mitigating Commercial Credit and A/R Fraud,” hosted by NACM will share pertinent information on how businesses can protect themselves from this type of fraud and how it impacts a business’s accounts receivables (A/R) risk and management. The webinar will focus primarily on the type of fraud risks that credit and finance professionals would be likely to encounter.
“Our presentation will talk about possible ‘blind spots’ that many of our member companies may currently have regarding potential exposure to A/R fraud,” said Bob Karau, manager of client financial services for law firm Robins Kaplan LLP. Michelle Killian, a security analyst for FRSecure will co-present.
Karau and Killian will discuss some of the most prevalent commercial fraud schemes preying on businesses today and will cover domestic and international scenarios. Topics will include where to find the most recent news on new commercial fraud schemes, safeguards and protocols to implement to combat this growing threat, and a list of best practices that many companies now follow to safeguard corporate assets. The duo will also discuss seven simple steps credit professionals can take when performing a new credit check to detect possible fraud.
- Diana Mota, NACM associate editor
To learn more about the webinar or to register, click here.