Business Email Compromise (BEC): Attacks, Scams & How to Stay Safe

Business Email Compromise (BEC) is one of the fastest-growing cyber threats targeting companies of every size. At its core, BEC attacks trick employees into sending money or sensitive information to criminals who are posing as trusted colleagues, clients, or executives.

These scams can look surprisingly legitimate, i.e., an email from “the CEO” asking you to process an urgent payment, or a vendor “following up” with new banking details. But falling for one wrong click can cost your business millions.

In this article, we’ll walk through how BEC attacks work, the different types of business email compromise scams, and the steps your team can take to stay protected. At Kumospace, we’re all about helping teams work together safely and confidently, because secure communication is the foundation of great collaboration.

• Business Email Compromise (BEC) targets organizations through impersonation to manipulate employees into unauthorized financial transactions, leading to substantial financial losses.
• BEC attacks differ from generic phishing attacks by being highly personalized and exploiting established trust relationships within organizations.
• Effective prevention of BEC requires a multi-layered approach, including robust email security, multi-factor authentication, continuous employee training, and a well-defined incident response plan.

Business Email Compromise (BEC) is a form of cyberattack that involves unauthorized access to or impersonation of email accounts to deceive organizations into transferring money or sensitive information. The primary goal of BEC attackers is to exploit human trust and manipulate employees into taking actions that result in financial gain for the perpetrators, leading to vendor email compromise, email account compromise, and compromised account business email compromise attacks.

The prevalence of BEC attacks has surged, with nearly 70% of businesses in certain sectors experiencing at least one attack. The financial impact is staggering, with claimed losses exceeding $2.4 billion in 2021 alone. Attackers often use spoofed email accounts to enhance credibility, impersonating high-level executives or trusted partners to request urgent wire transfers or sensitive data.

The rise of remote work and increased reliance on digital communication channels have further exacerbated the risk of BEC attacks. As businesses continue to adapt to these new realities, understanding and preventing BEC becomes ever more critical.

While both phishing and BEC involve deceit, they differ significantly in their approach and objectives. Phishing attacks typically cast a wide net, sending mass emails to numerous individuals without specific targeting. The primary goal is to obtain sensitive information or credentials through phishing links, malicious links, or attachments.

In contrast, BEC attacks are highly personalized scams that exploit trust within organizations. BEC scammers impersonate trusted figures such as executives or vendors to instigate financial transactions. The primary objective is financial gain, achieved through deception and manipulation of targeted individuals.

BEC attacks heavily rely on social engineering tactics to build trust and manipulate victims. Social engineering is central to BEC schemes, focusing on exploiting established relationships and human behavior. A successful bec attack often involves influence, insistence, and legitimacy to make requests appear credible and urgent.

Impersonation is a common strategy in BEC attacks. Attackers frequently pose as high-ranking officials or trusted partners to instigate unauthorized actions. Email spoofing, where attackers create fake email addresses that closely resemble legitimate ones, is a prevalent tactic to deceive victims.

To enhance their credibility, BEC attackers may engage in low-risk communications initially, gradually building trust before executing the attack. This psychological manipulation aims to gain the target’s trust, making them more likely to comply with fraudulent requests.

BEC scams come in various forms, each targeting specific roles and exploiting different vulnerabilities within organizations. The FBI identifies five main types of BEC scams, including CEO fraud, invoice scams, and payroll diversion fraud. These scams often target high-level executives or employees with payment authorization, using advanced impersonation techniques to deceive victims.

Invoice scams involve attackers pretending to be vendors and requesting payments using modified invoices, including fake invoices. The end goal is to redirect payments to accounts owned by the hackers, resulting in significant financial losses for the targeted organization. Attackers typically modify official vendor invoice templates, changing the account details to their own fraudulent accounts, often as part of a false invoice scheme.

In some cases, attackers create fake vendor identities to send fraudulent invoices. They often use spoofed email addresses and urgent requests to pressure employees into transferring money quickly, without proper verification. This tactic exploits the busy routines of employees, making them more likely to steal money without thorough scrutiny.

CEO fraud is a specific type of BEC scam where attackers impersonate the CEO to manipulate employees into making financial transactions or divulging sensitive information. This scam typically targets the finance department, where employees are pressured to transfer funds to accounts controlled by the attackers.

Attackers use domain spoofing to make their emails appear legitimate, often sending urgent, time-sensitive requests to create a sense of urgency. This emotional manipulation aims to bypass critical verification steps, leading to successful BEC attacks.

Data theft in BEC attacks typically targets HR or finance team members to obtain personal information. This stolen data can be sold on the dark web or used in future cyberattacks. By gaining access to sensitive information and confidential information, attackers can further compromise multiple accounts within the organization.

BEC attackers often use social engineering tactics to:

• Gain access to login credentials and other sensitive company data.
• Use this information to create fake login pages or send malicious links.

Lead to a broader compromise of the organization’s data security through social engineering attacks.

Recognizing the signs of a BEC attack is crucial for preventing financial and data losses. One common tactic is the use of urgency to manipulate targets into making quick decisions without proper verification. In CEO fraud, attackers often exploit emotional manipulation, creating a sense of urgency to pressure employees into compliance.

Changes in the usual communication style of a sender, such as tone or phrasing, can indicate that an email may not be legitimate. Employees should be wary of unexpected or unusual payment requests or financial transactions, especially if they are framed as an urgent wire transfer, and a wire transfer is legitimate. Additionally, it is important to know how to transfer money securely when sending money.

The use of AI and machine learning by threat actors has made BEC emails increasingly convincing. These sophisticated messages mimic legitimate business communication, making it challenging to identify fraudulent emails. Employees should also watch for suspicious email accounts that resemble official addresses but contain slight alterations in the domain or username.

BEC attacks typically begin with:

• The attacker impersonates someone of authority within the organization.
• Monitoring email conversations after gaining access to better position themselves for deception.
• Initial communications that are often low-risk, aimed at establishing credibility before executing the fraudulent request.

Attackers frequently use email spoofing techniques to impersonate legitimate users or executives without gaining initial inbox access. The execution phase involves sending messages that appear legitimate, requesting financial transactions or sensitive data. Funds are usually redirected through a complex network of accounts to obscure the origins and prevent traceability.

To maintain access and avoid detection, attackers may create automated inbox rules to hide their activities or forward messages to external addresses. This allows them to carry out additional fraudulent activities or target other individuals within the organization.

Protecting against BEC attacks requires a multi-layered security approach that combines technical controls with user awareness and phishing protection training. Key components include securing all communication channels, visibility into attacks, and robust email protection.

An engaged and knowledgeable workforce is the best defense against BEC scams.

Implementing Multi-Factor Authentication (MFA) enhances security by requiring multiple verification methods before granting access. This additional layer of security can significantly lower the risk of unauthorized access from stolen credentials.

Advanced email security solutions improve the detection of BEC threats through AI and behavioral analytics. These tools can identify unusual patterns and suspicious activities that may indicate a BEC attempt. Email security features such as attachment scanning and URL verification are essential for preventing BEC attacks.

Organizations should also implement domain-based message authentication to ensure the legitimacy of incoming emails and legitimate email account verification. This helps to prevent spoofed email addresses and enhances overall email security.

Continuous employee training is critical for safeguarding against BEC attacks. Regularly updating training modules about social engineering techniques enhances employee awareness and their ability to recognize BEC attempts. Conducting security awareness training and drills, and simulations of BEC scenarios can help assess the effectiveness of the training programs and improve response capabilities.

An informed and vigilant workforce can significantly reduce the risk of successful BEC attacks. Employees are often the first line of defense and should be equipped with the knowledge to respond effectively to potential threats.

Having a thorough incident response plan is crucial for effectively managing and mitigating the impact of BEC incidents. This plan should include defined roles and responsibilities for team members during a BEC incident to ensure a coordinated and timely response. Regularly reviewing and updating the incident response plan helps organizations adapt to evolving BEC threats and stay prepared for future attacks.

Conducting simulations of BEC attacks can significantly improve an organization’s readiness and response capabilities. These simulations help identify potential weaknesses in the response plan and provide valuable insights into how to enhance the overall security posture. Partnering with cybersecurity experts can further enhance an organization’s ability to respond to BEC incidents by providing specialized knowledge and support.

Establishing strong security policies for validating financial transactions is also crucial for BEC prevention. These policies should include multiple layers of verification to ensure that all financial requests are legitimate and authorized, and to verify requests effectively.

Real-world examples of BEC incidents highlight the significant financial impact these attacks can have on organizations. For instance, Elkin Valley Baptist Church in North Carolina lost $793,000 in construction funds due to a BEC attack. Similarly, a Minnesota city fell victim to a BEC scam, resulting in a loss of $1.2 million when a fraudster impersonated a contractor’s president and changed payment details.

In another case, cybercriminals executed schemes that drained $11.1 million from Medicare and Medicaid programs by impersonating legitimate businesses. A real estate firm in Paris suffered a loss of €38 million due to an international BEC scam that involved impersonating a lawyer. These incidents underscore the critical need for business operations to bolster their cybersecurity measures to prevent similar attacks.

The financial impacts of BEC incidents are wide-ranging and can be devastating for organizations. Eagle Mountain City in Utah lost $1.13 million when scammers impersonated a vendor and redirected funds. Grand Rapids Public Schools in Michigan were defrauded of $2.8 million by a couple who accessed the email account of a benefits manager. These examples illustrate the importance of having robust security measures and incident response plans in place to protect against BEC attacks.

The future of BEC attacks is evolving rapidly, with the use of generative AI leading to a significant rise in the volume of attacks. Key developments include:

• AI-generated emails that are increasingly indistinguishable from legitimate business communications, making detection and prevention more challenging.
• Incorporation of social engineering tactics across multiple channels.
• Use of AI voice cloning for video calls.
• Use of QR codes by attackers.

Regulatory changes, such as mandatory email authentication, are expected to impact the frequency and nature of BEC attacks. These changes aim to enhance the security of email communications and reduce the risk of email spoofing and other BEC exploits.

BEC attacks are evolving rapidly due to technological advancements. Changing business practices are also contributing to this trend. Organizations must stay informed about these trends and continuously adapt their security measures to protect against future threats as BEC schemes evolve. The BEC attacker poses a significant risk to organizations.

Human-centric security prioritizes the protection of individuals as key components in a cybersecurity strategy. This approach focuses on addressing human vulnerabilities and fostering a proactive security culture within organizations. By prioritizing user awareness and behavioral reinforcement, organizations can significantly reduce incidents associated with human error.

Effective human-centric security incorporates real-time behavioral analytics to identify and respond to human-targeted attacks. The integration of AI and machine learning enables organizations to personalize security training based on individual risk profiles, enhancing the overall effectiveness of the training programs.

Organizations employing human-centric approaches often see a cultural shift where employees evolve from being perceived as vulnerabilities to becoming active defenders. Continuous behavioral reinforcement through targeted training can lead to measurable changes in user behavior regarding security practices, ultimately strengthening the organization’s defense against BEC attacks.

In conclusion, Business Email Compromise (BEC) is a growing threat that targets organizations through deception and manipulation. BEC attacks are highly personalized and exploit trust within organizations to achieve financial gain. Recognizing the signs of BEC attacks, such as urgent requests and changes in communication style, is crucial for preventing financial and data losses.

Protecting against BEC attacks requires a multi-layered security approach, including implementing Multi-Factor Authentication (MFA), advanced email security solutions, and continuous employee training. A thorough incident response plan and a human-centric security strategy are also essential for effectively managing and mitigating the impact of BEC incidents. By staying informed and proactive, organizations can safeguard against the evolving threat of BEC.