Cyber Criminals Reap $2.3 Billion

This is becoming bigger and dangerous by the day. Cyber criminals reap $2.3 billion through ‘business email compromise’.

Businesses are losing billions of dollars to fast-growing scams where fraudsters impersonate company executives in emails that order staff to transfer to accounts controlled by criminals. A similar spoofing story concerning Flipkart’s CEO Binny Bansal is fresh in our minds.

According to the US Federal Bureau of Investigation, losses from these scams, which are known as "business email compromise," totaled more than $2.3 billion (roughly Rs. 15,345 crores) from October 2013 through February of this year.

The cases involved some 17,642 businesses of all sizes scattered across at least 79 countries, according to the FBI alert posted on the website of the agency's Phoenix bureau. Law enforcement and cyber-security experts have been warning that business email compromise was on the rise, but this is the first time the extent of losses has been disclosed.

The losses are expected to grow as the high profits will attract more criminals. "It's a low-risk, high-reward crime. It's going to continue to get worse before it gets better," said Tom Brown, a former federal prosecutor in Manhattan.

The FBI's alert cautions that fraudsters undergo detailed research to spoof company email accounts and use other methods to trick employees into believing that they are receiving money-transfer requests from CEOs, corporate attorneys or trusted vendors. "They research employees who manage money and use language specific to the company they are targeting, then they request a wire fraud transfer using dollar amounts that lend legitimacy," the alert said.

Target businesses are those that work with foreign suppliers or regularly perform wire transfers. Austrian aircraft parts FACC said in January that it lost about EUR 50 million (roughly Rs. 366 crores) through such a scam. In Arizona, the average loss ranges from $25,000 to $75,000, according to the FBI.

Federal Bureau also noted a 270 percent increase in identified victims and exposed loss since January 2015.