One email can change everything—especially if it’s a cleverly disguised scam. Business Email Compromise (BEC) is a growing threat, costing businesses nearly $3 billion in 2023 alone. For small and medium-sized businesses (SMBs), the consequences of a successful BEC attack can be devastating, leading to financial loss, operational disruption, and damaged client trust.
In this blog, we’ll explore BEC, share real-world examples, and outline steps to protect your business from this billion-dollar scam.
What is BEC?
Business Email Compromise (BEC) is a targeted cybercrime where attackers trick organizations into sending money or sensitive information by impersonating high-level executives or trusted vendors. These scams are meticulously planned, making them difficult to detect and particularly harmful to resource-constrained SMBs.
Common BEC Tactics:
- Spoofing: Subtle changes in email addresses or websites to appear legitimate.
- Phishing: Emails that mimic trusted sources to extract confidential information—over 90% of successful cyberattacks start this way.
- Malware: Software that infiltrates networks to access real email threads related to billing and invoices.
Real-World Examples of Business Email Compromise
Xoom (2014)
A BEC attack on Xoom resulted in the transfer of $30.8 million to fraudulent overseas accounts. The incident involved employee impersonation and fraudulent requests targeting the company’s finance department. As a result, Xoom’s CFO resigned, and the company’s stock price dropped by 14%.
MGM Resorts (2023)
Hacker groups used social engineering tactics to infiltrate MGM’s systems, leading to a ransomware attack. The attack left parts of Las Vegas paralyzed for days and cost the casino an estimated $100 million. Federal authorities and the White House were involved in the recovery effort.
City of Lexington, Kentucky (2022)
City employees in Lexington received an email from someone claiming to be from the Community Action Council, requesting to update the organization’s bank account information. Unaware that the email was from a threat actor, Lexington sent three wire transfers totaling around $4 million to the attacker’s account.
These business email compromise examples highlight the varied and sophisticated tactics cybercriminals use in BEC attacks. Whether through social engineering, privilege misuse, or phishing, each attack type exploits specific vulnerabilities. Let’s take a closer look at the most common methods these criminals use.
Common BEC Attack Types
- Social Engineering: Social engineering is the art of manipulating, influencing, or deceiving you to gain control over your computer system. The hacker might use the phone, email, snail mail, or direct contact to gain illegal access.
- Privilege Misuse: Privilege misuse is the misuse of access rights or privileges granted to users within an organization. This can involve exploiting these privileges to perform unauthorized actions, such as accessing sensitive data, altering system configurations, or executing malicious activities.
- Stolen Credentials: Credential theft is a type of cybercrime that involves stealing a victim’s proof of identity. Once credential theft has been successful, the attacker will have the same account privileges as the victim.
- Vendor Invoice Scam: An invoice scam is a deceptive ploy where bad actors masquerade as legitimate vendors. Armed with counterfeit branding and falsified details, they dispatch fake invoices, banking on businesses to remit payments without authenticating the legitimacy of the request.
- PII Data Theft: Cybercriminals breach data systems to access Personally Identifiable Information (PII) and then sell it to willing buyers in the underground digital marketplaces. For example, in 2015, the Internal Revenue Service (IRS) suffered a data breach leading to the theft of more than 100,000 taxpayers’ PII.
Evolving Cyber Threats
Cyberattacks can occur across various communication channels, including emails, SMS, voice calls, and messaging apps like Teams, Zoom, or WhatsApp. Multi-channel attacks combine techniques for invoice fraud and executive impersonation. Additionally, the weaponization of open-source GenAI GPT tools enables hackers to launch targeted business email compromise attacks at scale with minimal cost.
Defending Your Organization Against Business Email Compromise
1. Security Awareness Training
Building a cybersecurity culture within your organization is crucial. Regular training helps employees recognize and respond to potential threats.
2. Cybersecurity Best Practices
Adhering to industry-specific compliances and regulations can significantly reduce the risk of BEC attacks.
- Employee Training: Teach employees to recognize BEC threats, scrutinize unusual requests, and use strong, secure passwords with a password management system.
- Simulated Attacks: Conduct regular phishing simulations to assess and improve employee awareness.
- Multi-Factor Authentication (MFA): Implement MFA alongside a strong password policy to add an extra layer of security.
- Conditional Access Policies: Use tools like Microsoft 365/Azure to enforce security controls before granting access.
- Vigilance with Communication: Encourage careful examination of email addresses, URLs, and any requests for sensitive information.
3. Managed Detection & Response (MDR)
Managed Detection & Response (MDR) combines advanced technology and human expertise to detect, analyze, and respond to threats that bypass preventive tools. By partnering with an MDR solution provider, you gain:
- Proactive Threat Detection: Continuous monitoring of suspicious activities, like unauthorized logins and privilege escalations.
- Expert-Led Investigations: Cybersecurity professionals triage alerts and distinguish between false positives and real threats.
- Clear Communications: Incident reports with actionable next steps are provided, ensuring clarity for all stakeholders.
- Effective Remediation: Automated responses, such as identity isolation, help contain threats immediately, with expert assistance for more complex issues.
MDR shifts your security posture from reactive to proactive, giving your business a decisive edge against cyber threats.
Business Email Compromise isn’t just a threat to be aware of—it’s a call to action. By investing in robust cybersecurity measures and fostering a culture of vigilance, your SMB can stay one step ahead of cybercriminals. The question isn’t if you’ll be targeted, but when. Will you be ready to defend your data and employees?
