A newer cyber scam is on the rise in 2016, netting $2.3 billion for criminals over the past three years. The CEO Email Scam—also known as Business Email Compromise (BEC)—tricks targeted employees into wiring money when they receive a bogus message from their company’s CEO.
The cyber criminals pass themselves off as a CEO, using an email address so similar to the real thing, the difference can go unnoticed. The messages go to someone in the company who is authorized to deal with money and asks for quick and confidential approval —usually because of an impending business deal.
This scam has been so successful the FBI has issued an alert citing complaints in every state in the US in addition to 79 other countries. When successful, the typical damage amount is between $25,000 and $75,000.
The FBI has reported a 270 percent increase in CEO fraud since the beginning of 2016. Scoular Company lost $17.2 million in 2015 and another company, Ubiquiti Networks, lost $40 million later that same year.
In 2015, Lockton Affinity picked Beazley Syndicates at Lloyd’s of London as the professional liability underwriting carrier for a national Registered Investment Advisor (RIA) Liability Program. The RIA Insurance Program provides US investment advisor firms with a variety of commercial insurance solutions, including Cyber Liability and Network Security Protection.
Cyber Liability, along with employee education, is essential in protection against BEC and CEO fraud. Click here for more information on cyber fraud.