Resources Hub - CEO Fraud: How Scammers Impersonate & How to Prevent?

Between 2016 and 2019, companies lost over $26 billion worldwide as a result of Business Email Compromise (BEC) or CEO fraud attacks, according to the FBI. Cybercriminals impersonate CEOs and business higher-ups to appear trustworthy when convincing victims to provide sensitive or private credentials. Once this information is in the threat actor’s hands, organizations can suffer data loss, account takeovers, and reputational damage. This article will discuss CEO fraud, the most popular attack methods, and your options to prevent these email security risks.

What Is CEO Fraud and How Does It Work?

In CEO fraud attacks, also known as Business Email Compromise, an attacker pretends to be a C-level executive to target employees and gain access to financial information and sensitive data. During this specific type of phishing attack, a cybercriminal typically tricks workers into transferring money into an unrelated bank account or sending confidential information. These phishing campaigns can convince employees to provide credit card and bank information that hackers can use when conducting fraudulent wire transfers and account takeovers.

This type of threat involves more research on the malicious actor’s end, as they must have a lot of details regarding the company and its daily operations. Studying this information gives threat actors an advantage over unsuspecting workers who, easily convinced, send various credentials to these hackers without a second thought. These fraudulent emails urge recipients to take immediate action when replying and providing whatever sensitive intel the threat actor is trying to get. Such messages keep victims from verifying the contact information before taking action, as they are working quickly and not concerning themselves with legitimacy and whether or not the email is from a compromised account.

How Can I Identify CEO Phishing and Fraud Attacks?

Knowing the popular CEO fraud threat types is vital in ensuring you can detect, prevent, and protect against such email security issues in the future. Here are the most common email threats:

1. Phishing: These email attack types target large groups of email users simultaneously to “fish” sensitive information from such recipients. Cybercriminals pose as reputable, trustworthy sources by creating legitimate-appearing logos and companies that employees hardly bat an eyelash at when sending bank account or credit card information to CEO impersonation attackers. Email links that workers click on will redirect them to phishing pages where threat actors can steal your personal and financial data and login credentials.
2. Spear Phishing: This specialized type of phishing attack targets a smaller group of users by researching and collecting data about their company. These emails go to one person or sect in an organization that uses the services or bank that the threat actor impersonates, and the hacker will use names to appear more trustworthy.
3. Executive Whaling: During a CFO or whaling attack, cybercriminals target executives and administrators to siphon money from their accounts and steal confidential data. Threat actors typically research executives and businesses to succeed in email security breaches.
4. Social Engineering: This CEO fraud threat type focuses on psychological manipulation to trick users into divulging confidential information and providing financial credentials. Hackers research social media, LinkedIn, and other online venues to learn about an organization and convince users to give up sensitive data.

How Can I Stop and Prevent CEO Fraud?

As CEO fraud becomes more effective and harmful, you must know a few tactics and email security policies you can implement to defend your servers against such a threat. Here are a few immediate suggestions:

1. Have your employees undergo email security training so they have an understanding of the privacy and security issues they might encounter while working. Awareness gives employees a sharper eye for these email threats, allowing them to respond to CEO fraud quickly and effectively.
2. Educate employees about any domain names and variations they should know so they can be wary of requests from an unknown location.
3. Utilize a centralized wire transfer file where account teams must follow proper documentation and approval policies to avoid fraudulent transfers. Confirm that any purchase in the accounting system has a secure match. See if your initiator and approver work together or separately so you can determine the best approach to this process. Consider adding a phone call to the approval process if your organization is on the larger side.
4. Integrate Multi-Factor Authentication into all the apps and domains you use, including financial systems and wire transfers, to verify that only your employees are entering the server, thus protecting your email security services.
5. If you encounter a Business Email Compromise, report the incident to the FBI or US Secret Service offices immediately so they can handle issues quickly.

Ensure that your employees understand any email security policies you enforce at your business so that workers can stop CEO fraud before it can harm your company.

Guardian Digital’s Method for Mitigating CEO Fraud Risks

The CEO fraud prevention tactics listed above can be time- and energy-consuming, taking time away from urgent company tasks. Fortunately, Guardian Digital offers a hands-off defense-in-depth approach to online safety. Guardian Digital EnGarde Cloud Email Security software utilizes an open-source development model that is innovative and collaborative to protect businesses from CEO fraud, sophisticated email threats, and other email security issues.

EnGarde serves as an email security gateway by analyzing countless email attributes, scanning links and attachments to see if they carry malicious code, and ensuring that every message sent or received is safe and legitimate. This solution implements advanced email authentication protocols that prevent online email spoofing, CEO fraud, and more dangerous impersonation attacks. These protocols guarantee that all messages that reach your inbox are not from compromised accounts.

Guardian Digital security professionals monitor the server entirely, so you never have to prioritize checking your email security. This hands-off solution relieves many organizations from stressing about having the time and staff to maintain online safety.

Final Thoughts on CEO Fraud Protection

Due to CEO fraud scams, companies have suffered financial implications, data loss, significant downtime, and reputational damage. Therefore, you must stay vigilant when combating such email threats. Implement email security training in your organization so all employees know how to identify an attack and what to do to stop it. Consider integrating a few of the best practices for email security we suggested to prevent any CEO fraud attack from entering your system. Guardian Digital EnGarde Cloud Email Security software is an effective solution for mitigating and preventing email threats through its behind-the-scenes monitoring landscape that allows you to focus on your company’s tasks instead of risks.