Corona Virus And BEC Scams

Business Email Compromise (BEC) has been around for several year now. The recent crisis has created another opportunity for these fraudsters to perpetrate BEC scams.

The FBI released a report today which concludes that fraudsters will use BEC scams to perpetuate frauds during the current pandemic and may interrupt the medical supply chain. The FBI used four distinct examples of recent BEC frauds affecting the medical supply chain. In several of the examples, brokers seeking medical supplies such as N-95 masks were scammed by fraudsters who had established fictitious email accounts on legitimate medical supply companies in China.

The pandemic has created a need to act quickly and the immediacy has created an excuse or an opportunity for the usual scrutiny on such large transactions to be forgotten or bypassed. The BEC fraud depends on necessity and time constraints. In the pre-pandemic version of the scam, the fraudsters would wait until the person making the decisions was unavailable for questions, such as when they are traveling, on vacation, on a family emergency or any number of other circumstances which would dictate that the primary person be unavailable.

The second hallmark of the BEC scam is immediacy, a circumstance or event which dictates that the transaction take place immediately. The pandemic has created the perfect opportunity because all of the medical supplies in short supply now are immediately necessary to save lives.

It is more important now than ever before to take the time to ensure the bona fides of the person of the suppliers. There will be pressure to circumvent the normal procedures for payment, shipment, and delivery. There are some old sayings that come to mind when dealing with BEC fraud – haste makes waste; and, the tyranny of the urgent. Take the time to:

• Verify who you are dealing with.
• Verify not only the person, but the company, the address, and others whose names and titles and positions can be verified from the company’s website.
• When dealing with overseas companies, consult experts such as bankers and businesspeople who have dealt with that country or company before.
• Ask for local references from someone with whom you can meet face to face or talk on a telephone call before placing the order or wiring the money.
• Consider the source of the information. Did you find the site on through an internet search, or did someone you know and trust make the introduction for you?
• Do not circumvent policies and procedures – they most likely have been put there for a reason; circumvention and a willingness to circumvent create opportunity for fraud.
• Consider an escrow account as an intermediary step if ordering overseas.
• Verify any accounts with your bank and their bank; require that their bank verify the name on the account before the money is sent.

After dealing with fraudster and scammers for almost 30 years, unfortunately I know that they can spot an opportunity and will not pass on a chance to make money.