Don't be fooled by the name: CEO fraud has nothing to do with your CEOs trying to deceive anyone.
In actuality, it's an increasingly common type of cyber attack where scammers impersonate CEOs, executives or high-level employees to trick others into sending money or sensitive information.
CEO fraud can cause severe financial and reputational damage to organisations of all sizes.
So, buckle up and let's dive into what makes CEO fraud more complex than traditional phishing attacks, how to spot it, and how to avoid it. Let’s get started.
As mentioned in our introduction, CEO fraud is a form of phishing scam in which cybercriminals impersonate a high-level executive or company leader to trick employees, vendors, or customers into transferring money or sensitive information.
Also known as business email compromise (BEC) scams, these attacks can cause significant financial and reputational damage to organisations of all sizes.
Scammers cast a wide net in traditional phishing attempts, hoping to catch a few fish. They send out generic emails that look like they're from reputable sources, such as banks or online retailers, and try to trick people into clicking on a link or opening an attachment.
In contrast, CEO fraud is a highly targeted attack, utilising powerful psychology.
Scammers research their victims, learn about their organisations, and craft convincing emails that appear to come from a trusted source within the company.
They might even use a closely related email to the CEOs or spoof it to make it look real. The goal is to make the recipient believe the request is urgent and legitimate and to act quickly without questioning it.
The stakes are high in CEO fraud because scammers are after big payouts.
They often request large wire transfers or access to sensitive company data. Because the emails appear to come from within the company, victims are more likely to comply without verifying the request.
This is what makes CEO fraud more complex than traditional phishing. It's not just about fooling people into clicking on a link; it's about gaining their trust and manipulating them into doing something that could have serious consequences.
Scammers will often create a sense of urgency to pressure their victim into acting quickly. They might say that the wire transfer needs to be completed immediately or that a time-sensitive issue needs to be addressed. Because you respect their authority, this can bypass your scepticism and make you act without due thought.
If you receive an email that demands immediate action without proper explanation, it could be a sign of CEO fraud.
Scammers will ask for unusual or out-of-the-ordinary requests, such as a wire transfer to a foreign bank account or access to sensitive company information. If you receive a request that seems odd or doesn't make sense, it's important to double-check with the supposed sender before taking any action.
Scammers can spoof email addresses to make it look like the email is coming from a trusted source. If you receive an email that appears to be from your CEO but the tone or wording seems off, the email may be fake.
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Scammers may use unusual or incorrect language, especially if English is not their first language, which could indicate that the email is not from a legitimate source. Take time to consider whether an email sounds like it has come from your boss before acting.
If you receive an email requesting a change in payment procedures or routing information, it could be a sign of CEO fraud. Scammers may try to divert funds to their own accounts by changing payment information.
Scammers often use fear tactics to pressure their victims into taking action. For instance, they may threaten to terminate the victim's job or initiate legal proceedings against them if they fail to comply with their demands. This kind of psychological manipulation is designed to make the victim feel vulnerable and powerless, forcing them to take actions they otherwise wouldn't have
Scammers may also ask the victim to keep the request confidential, saying it's sensitive or confidential. This tactic prevents the victim from verifying the request with others.
Always verify wire transfer requests or unusual requests with the supposed sender, preferably through a different communication channel than email. Pick up the phone and call the person who sent the email to confirm that the request is legitimate.
Use two-factor authentication for any systems or accounts that contain sensitive information or allow for wire transfers. This adds an extra layer of protection and makes it harder for scammers to access your accounts.
Limit the amount of public information available about your organisation and its employees. Scammers often research their victims before launching an attack, so the less information they can find, the harder it will be for them to craft convincing emails.
Educate your employees about CEO fraud and other types of cyber attacks. Teach them how to spot phishing emails and what to do if they receive a suspicious email. It only takes one employee to fall victim to CEO fraud to cause severe damage to your organisation.
Phishing simulations are a powerful tool in the fight against cybercrime, specifically CEO fraud.
These simulations involve creating fake phishing emails that closely mimic the tactics used by scammers to trick employees into giving away sensitive information or making unauthorised payments.
These emails are then sent to employees within an organisation, and those that click are redirected to training, where they’re shown how they could have spotted this phishing attempt.
Bob’s Phishing from Bob’s Business is an award-winning phishing simulation service trusted by the likes of HM Government and tailored to your organisation's specific needs.
Our simulations are designed to be non-punitive and to replicate the most sophisticated tactics used by scammers, making them a highly effective way to identify weaknesses in an organisation's security infrastructure.
With the help of these simulations, your organisation can develop a comprehensive security awareness training program that educates employees on how to recognise and report suspicious emails.