What is Business Email Compromise? Types, Ways To Detect and Prevent It

Ram Ganesan
September 11, 2024

In a world where emails drive business communication, a single compromised message can lead to enormous losses. Business Email Compromise (BEC) is a targeted attack that relies on trust, disguising legitimate emails from executives or vendors to steal sensitive information. Unlike other cyber threats, BEC is stealthy, often going unnoticed until it’s too late.

Imagine receiving an urgent email from your CEO asking for a wire transfer. Everything appears to be in order, but then you find out the email was fake, and the money is lost. This is the brutal truth of BEC, a criminal activity that preys on habit and confidence.

But with the proper knowledge, you can fight back. In this blog post, we’ll explore the different types of BEC attacks, show you how to detect the signs, and provide actionable strategies to protect your business from this deceptive threat.

What is a Business Email Compromise (BEC)?

Business email compromise (BEC) is a form of targeted phishing or spear phishing. A BEC is a complex scam in which hackers obtain unauthorised access to an account and use it to manipulate partners, staff members, or clients into sending money or private information. Hackers do this by deploying social engineering tricks.

In contrast to other types of phishing attacks, BEC is highly focused and depends more on taking advantage of human weaknesses than technical ones. Attackers could use email communication flaws to carry out fraudulent transactions or obtain private information, which could result in significant economic losses and harm to one’s reputation.

Types of Business Email Compromise Attacks

BEC attacks come in various forms, each with its specific tactics and targets. Understanding these types is crucial for recognising potential threats:

1. CEO Fraud

In this case, attackers impersonate a high-level executive (often the CEO or CFO) and send urgent requests to employees with financial authority. These messages typically demand immediate wire transfers or sensitive information.

2. Account Compromise

This involves hacking an executive’s email account. With access to accurate correspondence, attackers can craft compelling messages and even intercept legitimate communications.

3. Lawyers Impersonation

It is a type of attack where criminals pose as lawyers or legal representatives, often claiming to be handling confidential or time-sensitive matters.

4. Data Theft

While many BEC attacks aim for direct financial gain, some focus on stealing sensitive information that can be sold or used for further attacks.

6. False Invoice Scheme

Attackers compromise a vendor’s email account and alter invoice details, redirecting payments to a fraudulent account. Vendors may fall victim if they regularly handle invoicing and payments through email communication.

Targets of Business Email Compromise

Anyone can be a target of BEC attacks. Businesses, governments, nonprofits, and schools are all the targets. But the following are the specific targets:

Executives and leaders
Finance employees
HR managers
New or entry-level employees

Are you at risk? Let us help you identify potential threats and safeguard your communication channels. Schedule a meeting with us.

How do BEC Scams Work?

BEC scams operate through a series of carefully orchestrated steps designed to bypass both technological defences and human intuition. Here’s a breakdown of their typical method of working:

The first step involves gathering information. Scammers research their target and try to fake their identity. They may even create fake websites or register companies with similar names to make their approach more convincing.
After gathering information, they try to gain access to the company’s email system, often through phishing attacks or malware. Once inside, they monitor email exchanges to understand who handles financial transactions and how the company communicates.
When the time is right, the scammer steps in by impersonating a trusted contact, such as a CEO, or CFO. They may use a spoofed website or email address that looks nearly identical to the real one, often changing just a letter or using a slightly different domain name.
The scammer then sends a convincing email, usually requesting a wire transfer, payment, or sensitive information. The email may appear urgent, pressuring the recipient to act quickly. Once the money is sent or the information is provided, the scammer disappears, leaving the business to deal with the fallout.

BEC scam’s success relies heavily on their ability to exploit normal business processes and human psychology, making them particularly challenging to detect and prevent.

How to Detect a Business Email Compromise Scam?

Unusual Urgency

One of the most common signs of a BEC attack is an email that demands urgent action. Whether it’s a sudden request for a wire transfer or a rush to provide sensitive information, any email that pushes you to act quickly should be treated with caution.

Unexpected Attachments or Links

Any unexpected attachment or link needs to be carefully examined, especially when it comes to emails asking for sensitive or expensive acts. Make sure staff members are taught to spot phishing efforts and use email filtering technologies to block potentially hazardous content.

Monitor Email Traffic for Unusual Activity

Regularly review your email logs and traffic for any unusual activity. Look for signs such as sudden changes in email patterns, unexpected requests for sensitive information, or unfamiliar IP addresses accessing your email accounts.

Check for Suspicious Email Behaviours

Be on the lookout for unusual email behaviours, such as unexpected changes in email account settings, unfamiliar forwarding rules, or new login locations. These can be indicators of a compromised email account.

Educate Employees

Training employees to recognise and respond to phishing attempts and other social engineering tactics is essential. Employees should be aware of common signs of BEC and know how to handle suspicious emails by regularly conducting security awareness training and phishing simulation exercises to keep employees informed about the latest threats.

Verify Requests for Sensitive Information

If a regular vendor suddenly changes their payment details or requests payment through a different method, it’s worth verifying these changes through a separate, secure channel secondary communication method. For example, if you receive an email asking for a wire transfer, please call the requester using a known phone number to confirm the request.

Don’t wait until it’s too late. Implement phishing email protection with our expert guidance. Get started now!

How Can Businesses Protect Themselves from BEC Attacks?

Defending against BEC attacks requires a multi-layered approach that combines technology, policy, and employee education. Here are essential strategies for protecting your business:

1. Implement Strong Email Security Measures

Use advanced email filtering solutions that can detect spoofed domains and suspicious content for the protection of your email.
Enable Sender Policy Framework (SPF), Domain Keys Identified Mail (DKIM), and Domain-based Message Authentication, Reporting & Conformance (DMARC) protocols to verify email authenticity.
Use AI-powered tools that can analyse communication patterns and flag anomalies.

2. Establish Strict Financial Controls

Implement a dual-approval process for significant financial transactions.
Verbal confirmation (via a known phone number) is required for any changes to payment instructions.
Set up alerts for unusual account activity or large transfers.

3. Educate and Train Employees

Conduct regular cybersecurity awareness training focused on social engineering tactics.
Simulate BEC attacks to test and reinforce employee vigilance.
Encourage a culture where questioning unusual requests is praised, not punished.

4. Enhance Authentication Protocols

Implement multi-factor authentication (MFA) for secure email accounts, especially those of executives.
Use unique and strong passwords for each account and consider password managers for the organisation.
Regularly perform cybersecurity audits and remove unnecessary access privileges.

5. Develop Clear Communication Policies

Establish guidelines for how sensitive information and financial requests should be communicated.
Create a list of “red flag” phrases or situations that should always trigger additional verification.
Implement a system for employees to report suspicious emails, email attacks or requests easily.

6. Secure Your Network Infrastructure

Keep all systems and software up-to-date with the latest security patches.
Use firewalls and intrusion detection systems to monitor for unusual network activity.
Segment your network to limit the potential spread of a compromise.

7. Have an Incident Response Plan

Develop and regularly practice a response plan for potential BEC incidents.
Establish relationships with law enforcement and cybersecurity firms before an attack occurs.
Create a communication strategy for notifying stakeholders in the event of a successful attack.

Strengthen your defences against BEC attacks—talk to our specialists about implementing strong security measures now. Contact us now!

Real-life Examples of BEC attacks

The FACC Case: A $47 Million Mistake

In 2016, Austran Aeronautics Company FACC was the victim of a BEC attack that cost the company €42 million (around $69 million). Attackers impersonated the CEO in emails to the finance department, authorising a significant transfer for a fake acquisition project.

The Nikkei America Inc. Incident: Intercontinental Deception

In 2019, Nikkei America Inc., a subsidiary of Japanese media giant Nikkei, fell victim to a BEC scam, resulting in a $29 million loss. An employee transferred the funds based on instructions in a fraudulent email purportedly from a management executive.

Key Takeaways

BEC attacks represent a significant and evolving threat to organisations worldwide. As we’ve seen, these attacks are not just sophisticated—they’re also incredibly costly.

But knowledge is power. By understanding how BEC attacks work, learning to spot the warning signs, and implementing robust prevention strategies, businesses can significantly reduce their risk. Remember, your most vigorous defence is a well-informed, vigilant team backed by solid security protocols and technology.

Your business deserves the best protection. Let’s talk about how we can secure your communications and protect your reputation. Start with a free consultation and protect your business from costly BEC scams. Stay alert, stay informed, and don’t hesitate to question unusual requests—even if they seem to come from the highest levels of your organisation.