Security Tips: Understanding Business Email Compromise and How to Safeguard Against It

Business Email Compromise (BEC) is a sophisticated type of cybercrime that targets organizations, businesses, and individuals by exploiting email communication. BEC typically involves hackers gaining access to corporate email accounts or impersonating legitimate business contacts to deceive employees, customers, or partners into transferring funds or disclosing sensitive information.

What is Business Email Compromise (BEC)?

BEC is a form of cyberattack where fraudsters use email as the primary tool to scam businesses into making unauthorized transfers of money or disclosing confidential data. Hackers often pose as high-level executives, trusted vendors, or even legal representatives to convince employees to take specific actions, such as wiring funds or sharing proprietary information.

There are five main types of BEC attacks:

1. CEO Fraud: The attacker impersonates a company executive (usually the CEO or CFO) and requests an urgent wire transfer.
2. Account Compromise: A company employee’s email is hacked, and used to request payments from customers or partners.
3. Attorney Impersonation: Hackers impersonate lawyers or legal representatives, typically at critical times such as closing a deal, pressuring victims to act quickly.
4. Data Theft: Rather than requesting money, attackers may request sensitive HR information, such as W-2 forms or employee tax information, which can be sold or used in future attacks.
5. Vendor or Supplier Impersonation: Fraudsters pose as vendors or suppliers, requesting payment to a fraudulent bank account.

The Growing Threat of BEC

According to the FBI’s Internet Crime Complaint Center (IC3), BEC is one of the costliest forms of cybercrime. It has affected companies of all sizes across a wide range of industries. The success of BEC lies in its simplicity: instead of relying on complex malware or software exploits, attackers focus on social engineering tactics and exploiting human trust.

Cybercriminals may spend weeks or months studying the organization’s communication patterns, identifying key personnel, and gathering information on upcoming transactions to make their emails more convincing. They may also use email spoofing, domain impersonation, or compromise the email accounts of legitimate parties to make their requests appear legitimate.

How Business Email Compromise Works

BEC attacks generally follow a multi-step process:

1. Research and Reconnaissance: Cybercriminals target a specific company or individual and begin gathering intelligence by studying publicly available information, such as websites, press releases, and social media profiles.
2. Email Compromise or Spoofing: Attackers may either hack into the actual email accounts of employees or executives or create fake email addresses that look nearly identical to legitimate ones. For example, instead of using johndoe@company.com, they might create johnd0e@company.com to trick the recipient.
3. The Hook: Once they have access, they send carefully crafted emails that appear to be from a trusted source, such as the company’s CEO, a vendor, or a legal representative. The emails typically contain urgent instructions to transfer money or provide confidential information.
4. Execution of Fraud: If the targeted employee falls for the scam and follows through with the requested action, the fraudster gains access to funds or sensitive information.
5. Laundering the Proceeds: Stolen funds are often quickly moved through a series of bank accounts, sometimes across multiple countries, to make it harder to trace and recover.

How to Protect Against Business Email Compromise

1. Train Employees to Recognize BEC:
   • Regularly educate employees about the different types of BEC attacks and warning signs, such as unexpected requests for large transfers, changes in payment details, or emails that create a sense of urgency.
   • Encourage employees to double-check the authenticity of any unusual request by contacting the sender through a separate communication channel (e.g., a phone call).
2. Implement Two-Factor Authentication (2FA):
   • Use two-factor authentication for email accounts, particularly those used by executives or individuals with access to financial data. This adds an extra layer of security by requiring a second form of verification in addition to a password.
3. Use Email Authentication Techniques:
   • DMARC, DKIM, and SPF: Implement email authentication protocols like DMARC (Domain-based Message Authentication, Reporting, and Conformance), DKIM (DomainKeys Identified Mail), and SPF (Sender Policy Framework) to prevent email spoofing and verify the authenticity of incoming emails.
4. Verify Payment Requests:
   • Establish a protocol for verifying any changes in payment information or requests for wire transfers. This can include requiring dual approval for large transactions or independently verifying the request with the requesting party through another communication method.
5. Monitor for Unusual Activity:
   • Set up email account monitoring for unusual behavior, such as login attempts from unfamiliar locations or sending patterns that deviate from the norm.
   • Flag emails with suspicious language, particularly those that include pressure to act quickly or bypass established procedures.
6. Regularly Update Software and Security Systems:
   • Keep all systems, software, and email platforms up to date with the latest security patches to reduce vulnerabilities that hackers may exploit.
   • Use secure email gateways with advanced threat detection capabilities to filter out phishing emails and malware before they reach employees.
7. Limit Exposure of Sensitive Information:
   • Restrict public access to information about your organization’s internal structure and upcoming financial activities. Limiting the amount of readily available information makes it harder for cybercriminals to craft convincing emails.
8. Establish a Response Plan:
   • Have an incident response plan in place in the event of a BEC attack. This should include immediate steps to shut down the compromised account, report the fraud to law enforcement, and notify the affected parties.

Conclusion

Business Email Compromise is a growing threat that can have devastating financial and reputational consequences for businesses. However, by staying informed about the nature of these attacks and implementing strong security measures, companies can significantly reduce their risk. Training employees, using email authentication protocols, and verifying requests through multiple channels are key strategies to protect against BEC.

As cybercriminals continue to evolve their tactics, proactive defense is essential to staying one step ahead of potential threats. Organizations that foster a culture of security awareness and implement technical safeguards will be best equipped to prevent and mitigate the risks associated with Business Email Compromise.