What is Business Email Compromise (BEC)? In-Depth Guide

What is Business Email Compromise (BEC)?

Did you know that businesses worldwide are facing a growing threat that has already cost them billions of dollars? Business Email Compromise (BEC) is a type of cyberattack that continues to evolve and wreak havoc on organizations of all sizes.

In this blog post, we’ll dive deep into the world of BEC, uncovering its various forms, how these attacks unfold, and the devastating impact they can have on businesses. More importantly, we’ll provide you with effective strategies and solutions to protect your organization from falling victim to these malicious scams.

Summary

• Business Email Compromise (BEC) is a scam where cybercriminals impersonate executives or partners to trick employees into transferring money or revealing sensitive data.

• BEC attacks can lead to significant financial loss, compromised data, and damage to a business’s reputation.

• Prevention strategies include employee training, robust email security systems, multi-factor authentication, and rigorous financial control procedures.

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Understanding Business Email Compromise (BEC)

Business Email Compromise (BEC) is a rapidly increasing and very costly crime that’s enabled by the internet. It involves cybercriminals posing as someone trustworthy, such as an executive or vendor, to gain access to sensitive information or money. The prevalence of BEC scams has been steadily rising, likely due to the increase in remote work, making it an even more dangerous threat for businesses.

The FBI sees BEC as a significant concern, as it can result in financial losses and damage to a company’s reputation. To better understand this growing menace, let’s explore the basics of BEC and its connection to Email Account Compromise (EAC).

The Basics of BEC

BEC is a type of cyberattack that involves bad actors pretending to be someone trustworthy, such as a company executive or a finance department employee, to manipulate individuals into divulging sensitive information, sending money, or helping the attacker commit fraud.

In some cases, scammers use phishing or malware to gain access to an employee’s email account, such as an accounts receivable manager, and send out fake invoices to the company’s suppliers, requesting payment to a fraudulent bank account. In essence, BEC exploits the trust built within an organization, making it a particularly insidious threat.

The Connection to Email Account Compromise (EAC)

While BEC focuses on the attacker pretending to be a trusted individual, EAC involves the attacker gaining access to a valid email account and acting as if they own it. This can make it even more challenging to spot and stop BEC and EAC, especially when relying on older tools, single-purpose products, and the security measures that come with cloud platforms.

The link between BEC and EAC is essential to understand, as more and more BEC-like scams are using compromised accounts to carry out their malicious activities.

Common Types of BEC Scams

To better equip ourselves against BEC attacks, it’s crucial to understand the various types of scams that the FBI and other cybersecurity experts have identified. These include CEO fraud, lawyer impersonation, data theft, email account compromise, and vendor email compromise. Each type of BEC scam poses unique risks, but all can lead to financial losses, damage to reputation, and other negative effects for businesses.

Let’s delve deeper into the details of each of these common BEC scams, beginning with CEO fraud, which targets unsuspecting employees by impersonating high-level executives.

CEO Fraud

CEO fraud is a type of spear phishing email attack in which the attacker pretends to be the company’s CEO or another high-ranking executive. The aim is to manipulate an employee into transferring money or sensitive data, such as intellectual property or credentials, to the attacker.

Scammers gain access to a CEO’s email account and send out instructions to employees to make a purchase, send money through wire transfer, or even buy gift cards and share the serial numbers. CEO fraud can have severe consequences for businesses, resulting in financial losses and reputational damage.

Vendor Invoice Schemes

Vendor Invoice Schemes involve scammers pretending to be legitimate vendors and sending fake invoices to trick companies into making payments. An attacker can pose as a vendor and manipulate an employee into making a payment for a service by altering the account details on an official vendor invoice template.

Staying vigilant and implementing security measures are crucial for preventing and mitigating the damage caused by these fraudulent schemes.

Legal Professional Impersonation

Legal Professional Impersonation is another type of BEC scam in which attackers hack lawyers’ email accounts and send fraudulent payment requests or invoices to clients. The attacker might impersonate a lawyer or someone from a legal team and try to pressure or manipulate an employee into taking action.

Legal Professional Impersonation can result in financial losses, harm to reputation, and other adverse effects on businesses.

How BEC Attacks Unfold

A typical BEC scam involves several steps, from target selection to execution. Understanding these steps can help organizations better protect themselves from potential attacks. BEC attacks usually happen through social engineering techniques, where attackers pretend to be trusted colleagues and ask for payments or confidential information.

To shed light on how these attacks unfold, let’s explore the process of targeting organizations and employees, gathering information, and finally, launching the attack.

Targeting Organizations and Employees

BEC attackers often target specific individuals within organizations, such as executives, HR, and finance personnel. They use social engineering and spear phishing to attempt to extract confidential information or money from their targets.

Scammers typically begin by creating a list of emails to target and impersonating someone on the corporate network to deceive the target into sending money to the attacker’s account. Being aware of these tactics and staying vigilant can help employees safeguard against these sophisticated attacks.

Gathering Information

Scammers research and gather information on their targets to make their attacks more convincing. They might use lead-generation tools like LinkedIn, social media platforms, business and industry news sources, and prospecting and list-building software.

They then employ social engineering, phishing, and reconnaissance techniques to manipulate targets into giving out confidential information. The more information attackers collect, the more convincing their emails may appear, increasing the likelihood of success.

Launching the Attack

Once attackers have collected enough information, they initiate the BEC scam through phishing emails or other social engineering tactics. They often start by sending out mass emails that seem to come from a legitimate source but contain a suspicious link or attachment.

Recognizing the signs of a BEC attack and taking appropriate action can help prevent financial losses and reputational harm.

The Impact of BEC on Businesses

The devastating impact of Business Email Compromise (BEC) on businesses cannot be overstated. It’s one of the most financially damaging online crimes, causing millions of dollars in losses worldwide. In 2021 alone, the Internet Crime Complaint Center (IC3) reported losses of over $2.4 billion due to BEC.

The consequences of a successful BEC attack extend beyond financial loss, damaging an organization’s reputation and eroding customer trust. Let’s examine the financial losses and reputational damage caused by BEC attacks in more detail.

Financial Losses

BEC attacks have resulted in staggering financial losses, with over $43 billion reported globally. In 2021 alone, the IC3 reported losses exceeding $2.4 billion. These losses primarily stem from wire transfer fraud, invoice fraud, and loss of sensitive information.

To safeguard against these financial losses, organizations must invest in robust security measures and employee training.

Reputational Damage

A successful BEC attack can have long-lasting consequences for a company’s reputation. Customers may lose trust in the organization if they believe it failed to protect their sensitive information. Reputational damage can result in a drop in customer loyalty, a dip in customer acquisition, and a decrease in overall brand value.

Preventing and mitigating BEC attacks is crucial in maintaining a company’s reputation and customer trust.

Strategies for Preventing and Mitigating BEC Attacks

To protect against BEC scams, organizations must adopt a multifaceted approach that includes employee training and awareness, implementing multifactor authentication (MFA), and utilizing email security tools. Being aware of common attack scenarios, creating a culture of compliance, and having a layered defense are essential in reducing the risk of BEC crime.

Let’s explore in detail some of the most effective strategies for preventing and mitigating BEC attacks, including employee training and awareness, MFA, and email security tools.

Employee Training and Awareness

Training and awareness programs that emphasize security culture and ongoing learning are crucial in reducing the risk of BEC crime. Employees should be taught how to spot potential phishing emails and requests, create secure passwords and update them regularly, back up all essential data, and run regular phishing simulations.

Equipping employees with the skills to identify and address suspicious emails and other malicious activities can significantly reduce the likelihood of a successful BEC attack.

Implementing Multifactor Authentication (MFA)

Multifactor Authentication (MFA) is an effective security measure that requires additional authentication factors, such as a code, PIN, or fingerprint, along with a password for logging in. Setting up MFA for all company email accounts can help protect against unauthorized access and Business Email Compromise (BEC) attacks.

Utilizing MFA strategies like one-time passwords (OTPs), biometric authentication, and hardware tokens can further enhance email account security.

Utilizing Email Security Tools

Email authentication tools such as SPF, DKIM, and DMARC can help protect against BEC attacks by verifying the sender’s identity and ensuring the message hasn’t been altered.

Advanced threat protection solutions, such as Avanan, Proofpoint, and Mimecast, can help detect and block BEC attacks in real-time, improving security and reducing the risk of financial losses and reputational damage.

Solutions for Combating BEC Threats

To protect against BEC threats, organizations should consider adopting a range of cybersecurity solutions, from secure email platforms with built-in security features to advanced threat protection solutions that can detect and block BEC attacks in real-time. Additionally, employee training and awareness programs that focus on identifying, assessing, and responding to BEC attacks are essential in reducing the risk of these malicious scams.

Let’s take a closer look at some of the available solutions for combating BEC threats, including secure email platforms and advanced threat protection solutions.

Secure Email Platforms

Secure email platforms like Mimecast’s cloud-based Secure Email Gateway with Targeted Threat Protection offer advanced security features to help protect against Business Email Compromise (BEC) threats. These platforms can help detect and block malicious emails and attachments, as well as provide additional layers of authentication to prevent unauthorized access.

Investing in a secure email platform is a crucial step in safeguarding your organization from BEC scams.

Advanced Threat Protection Solutions

Advanced threat protection solutions, such as Avanan, Proofpoint, Mimecast, Agari DMARC Protection, Tessian Cloud Email Security, and Barracuda Email Protection, use sophisticated algorithms and multi-layered approaches to analyze thousands of signals and detect complex email threats. These solutions offer real-time detection and blocking of BEC attacks, which can significantly improve security and lower the risk of financial losses and reputational damage.

Implementing advanced threat protection solutions is a crucial component in your organization’s defense against BEC attacks.

Summary

In conclusion, Business Email Compromise (BEC) is a pervasive and costly threat that has the potential to cause significant financial losses and damage to a company’s reputation. By understanding the various types of BEC scams, how they unfold, and their impact on businesses, organizations can better protect themselves against these malicious attacks. Implementing strategies such as employee training and awareness, multifactor authentication, and utilizing email security tools, as well as adopting secure email platforms and advanced threat protection solutions, can significantly reduce the risk of falling victim to BEC. Stay vigilant, invest in robust security measures, and protect your organization from the devastating consequences of Business Email Compromise.

How to stay safe online:

• Practice Strong Password Hygiene: Use a unique and complex password for each account. A password manager can help generate and store them. In addition, enable two-factor authentication (2FA) whenever available.
• Invest in Your Safety: Buying the best antivirus for Windows 11 is key for your online security. A high-quality antivirus like Norton, McAfee, or Bitdefender will safeguard your PC from various online threats, including malware, ransomware, and spyware.
• Be Wary of Phishing Attempts: Be cautious when receiving suspicious communications that ask for personal information. Legitimate businesses will never ask for sensitive details via email or text. Before clicking on any links, ensure the sender's authenticity.
• Stay Informed. We cover a wide range of cybersecurity topics on our blog. And there are several credible sources offering threat reports and recommendations, such as NIST, CISA, FBI, ENISA, Symantec, Verizon, Cisco, Crowdstrike, and many more.

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