Report: Business Email Compromise (BEC) Now A $12.5 Billion Scam

Email continues to be the top vector used by cybercriminals, and business email compromise (BEC) is gaining traction as one of the preferred types of email attacks.

BEC attacks do not contain any malware and can easily bypass traditional email security solutions. For cybercriminals, there is no need to invest in highly sophisticated and evasive malware. Instead, they engage in extensive social engineering activities to gain information on their potential targets and craft personalized messages.

What makes these attacks dangerous is that the email usernames and passwords of corporate executives are easily available to cybercriminals on the dark web, presumably due to data breaches of third-party websites or applications.

“Through 2023, business compromise attacks will be persistent and evasive, leading to large financial fraud losses for enterprises and data breaches for healthcare and government organizations,” says Gartner in their recent report, Fighting Phishing – 2020 Foresight 2020.

What is Business Email Compromise?

BEC attacks spoof trusted domains, imitate brands and/or mimic corporate identities. In many cases, the emails appear from a legitimate or trusted sender, or from the company CEO typically asking for wire transfers.

According to the FBI, BEC is defined as a sophisticated scam targeting businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. This is a very real and growing issue. The FBI has put up a public service announcement saying that BEC is a $12.5 billion scam.

Types of BEC or Email Fraud

Email has been around since the 1960s and the current internet standard for email communication —  Simple Mail Transfer Protocol (SMTP) — was not designed to authenticate senders and verify the integrity of received messages. Therefore, it’s easy to fake or “spoof” the source of an email. This weak sender identification will continue to present opportunities for creative attacks.

For example, here is a screenshot of a recent spoofing email that I encountered. The messaging seemingly originated from my colleague. The displayed sender’s name invokes an immediate recognition for the recipient. But a closer examination of the sender’s domain reveals the suspicious nature of the email.

Now, let’s look at the different types of spoofing techniques a threat actor might use to initiate an attack:

Display Name Spoofing
This is the most common form of BEC attack. In this case, a cybercriminal tries to impersonate a legitimate employee, typically an executive, in order to trick the recipient into taking an action. The domain used could be from a free email service such as Gmail.

Domain Name Spoofing
This includes either spoofing the sender’s “Mail From” to match that of the recipient’s domain in the message envelope, or using a legitimate domain in the “Mail From” value but using a fraudulent “Reply-To” domain in the message header.

Cousin Domain or Lookalike Domain Spoofing
This type of attack relies on creating visual confusion for the recipient. This typically involves using sister domains such as “.ORG” or “.NET” instead of “.COM,” or swapping out characters, such as the numeral “0” for the letter “O,” an uppercase “I” for a lowercase “L.” This is also sometimes referred to as typosquatting.

Compromised Email Account or Account Take Over (ATO)
This is carried out by compromising legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds or data theft.

Best Practices for Stopping BEC Attacks

Concerned your organization could fall prey to business email compromise? Here are some email security best practices that you can implement to protect against sophisticated BEC attacks.

  1. Block fraudulent emails by deploying Sender Policy Framework (SPF), Domain Keys Identified Mail (DKIM) and Domain-Based Message Authentication, Reporting and Conformance (DMARC) capabilities.
  2. Enable multi-factor authentication and require regular password changes to stop attacks from compromised accounts.
  3. Establish approval processes for wire transfers.
  4. Deliver periodic user-awareness training for a people-centric approach to combat email attacks.

How to Stop Email Spoofing

Whether it’s CEO fraud, forged emails, business email compromise (BEC), impostor emails or impersonation attacks, all email spoofing attacks present a dangerous risk to organizations. Review the solution brief to gain four key best practices to help mitigate the email spoofing attacks that impact your business.

Ganesh Umapathy on Twitter
Ganesh Umapathy
Product Marketing Manager, Cloud, Email & Mobility | SonicWall
Ganesh is SonicWall’s product marketing manager for email, mobility and BYOD, and cloud security solutions. He is responsible for go-to-market strategy, product launches, content creation and sales enablement. Ganesh has over 10 years of experience working in the technology industry in varying capacities across engineering, product management and product marketing roles. Ganesh holds an MBA from University of Washington, Seattle, and a bachelor’s degree in Electronics & Instrumentation Engineering from India.
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