It happens like this: CFO gets an email from the CEO requesting an emergency wire transfer to a certain “vendor”. Often times the sender’s email address appears legitimately to be the CEO’s email address, and the message is short and to the point. Depending on the level of sophistication of the scam, the email may actually appear to be related to a current project occurring at the company, accompanied with a legitimate looking invoice. If the email is sent at the “right time”, say, while the CEO is out on vacation, the CFO may comply with the request.
Scammers are known to research company websites, which often identify the CEO and CFO by name and email addresses, and current projects are sometimes written about either on the company website or in social media. That’s all a scammer needs to draft a very convincing (and urgent) email.
It is highly recommended that employees with wire transfer authority be trained to be alert and vigilant with regard to email requests for wire transfers. Train those employees to call the individual purported to be the requester and confirm by phone the request. If the requesting party is a vendor requesting payment term changes (another popular scam), call the vendor and confirm the veracity of the change. Furthermore, contact your insurance company and review if your current policy has protection in place for this type of event.
What to do if the transfer has already occurred: The first 24-48 hours are crucial. Contact your financial institution as well as the receiving financial institution, and attempt to halt the transfer. Additionally, contact the local FBI and/or U.S. Secret Service immediately. And after the dust settles, review this incident with pertinent employees and discuss how to prevent this in the future, it could happen again.
If you would like more information on how to help prevent this type of situation or others like it, please contact:
Chuck Mullen, Principal-Akron
Randy Misch, Principal-Cleveland