FBI Warns Of The $12 Billion Scam Taking On The World

The FBI’s Internet Crime Complaint Center (IC3) has issued a new public service announcement about what it calls the $12 Billion Scam. Every so often the IC3 posts numbers on how much business email compromise (BEC) scams are increasing. In July, its PSA revealed some shocking, but informative statistics on this scam.

BEC (also called email account compromise or EAC) scams are carried out when a bad actor targets a business or individual and convinces someone to perform a wire transfer or some other act involving the transfer of sensitive information. This may mean emailing W-2 information, for example. Between December of 2016 and May of 2018, these types of scams increased 136% in global losses. It’s been reported in all 50 states and in 150 countries. Based on the data collected, most of the funds end up in Asian banks, mostly in China and Hong Kong. However, financial institutions in other countries, including the UK have also been identified as recipients of the fraudulent funds.

Recent big targets for these scammers have been in the real estate sector. These include title companies, real estate agents, buyers, sellers, and law firms. Most of the time, victims reported receiving an email with a spoofed sender’s address that appeared to be from someone on behalf of one of the real estate transaction participants. Victims were instructed to change the payment location and/or type of payment to a fraudulent account. Between 2015 and 2017, the number of real estate related BEC scams rose by more than 1100%, according to the IC3 announcement. Monetary losses related to this industry rose nearly 2200%. Total domestic and international exposed dollar losses were $12,536,948,299. This number includes everything that is reported, regardless of country.

To protect yourself and your business from this type of fraud, there are some actions one can take:

• Independently verify all wire transfer requests. Not only is this just good practice, but often the scammers will request payments originally intended to be paid by check, be switched to wire transfer.
• Be suspicious of anyone who insists on communication only via email.
• Be wary of providing personal or sensitive information over the phone if there is not 100% confidence of the recipient’s motives on the other end of the line.
• Put processes in place to require secondary confirmation before transferring sensitive information over the phone, such as establishing code phrases only known by legitimate parties.
• Never exchange sensitive information in email. Most of the time, email is not encrypted and therefore not safe for transferring this type of information.
• If you discover or suspect a BEC scam, report it to IC3.