Attorney General Alerts

    Fraudsters Scamming Companies Out of Billions


    April 20, 2016

    A little-known scam has swindled a total of $2.3 billion out of both large and small companies across the world in the last three years, according to the Federal Bureau of Investigation. Scammers are spoofing a CEO’s email address, contacting employees and directing those employees to wire money from the company to a new vendor or for a new business venture. The overseas account, unbeknownst to the innocent employee, is a fraudulent account, and the money goes straight into the hands of scammers.

    This low-tech scam can be run from anywhere in the world. All these scam artists need is the company executive’s email address, which can usually be found through websites or a social media account. According to the Financial Times, many of these offshore bank accounts where the money ends up are located in Asia or Africa, but U.S. authorities have traced the money involved to 108 countries.

    Arkansas Attorney General Leslie Rutledge issued today’s consumer alert to educate Arkansas businesses about the potential of this scam.

    “While this scam may not have made recent headlines, it is impacting businesses across the country,” said Attorney General Rutledge. “These criminals use information gathered online to make the emails as convincing as possible. They then use high-pressure tactics, including follow-up phone calls to the employee, to ensure the employee follows through with the transfer.”

    Attorney General Rutledge released the following tips to prevent employees from falling victim to this scam:

    • Implement a verification system where staff can properly contact and check with the CEO or senior staff members.
    • Verify the legitimacy of the request by contacting the person using the contact information you have stored rather than the one given during the call or within the email.
    • Be vigilant to any urgent or confidential request not respecting the standard working procedure.
    • Follow your intuition. If there is any doubt, it is better to take the time to check.

    These scam artists are using persuasive dialog to convince these employees to wire the money, and they know staff are less likely to question directions from the CEO, coupled with a sense of urgency, manipulates the employees to following their instructions.

    This scam has been successful because there is nothing for traditional email security systems to block because it appears to be legitimate correspondence that is being sent directly to its target. Therefore, companies must educate employees and implement a verification system to avoid falling victim to this type of fraud.

    For more information on wire transfer scams and other consumer-related issues, contact the Attorney General's office at (800) 482-8982 or consumer@arkansasag.gov or visit ArkansasAG.gov or facebook.com/AGLeslieRutledge.

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