‘CEO Fraud’ A New and Growing Threat to Business
A recent National Fraud Intelligence Bureau (NFIB) report highlighted by the UK’s ‘Action Fraud’ has shown evidence of an increase in a kind of Fraud dubbed ‘CEO fraud’, so-called because fraudsters pose as senior staff members or Company Directors in order to obtain money.
How Does CEO Fraud Work?
CEO Fraud involves a fraudster emailing and / or calling a member of the Finance Department of a company e.g. the Financial Controller. In several recent real cases the first contact from the fraudster is reported to have been via gmail.com and yahoo.com email addresses.
The average amount of money requested from a company in a fraud of this kind is thought to be approximately £35,000. The account that the fraudster asks for the money to be transferred into is just a temporary first stop-off point for the money which is then quickly transferred to other mule accounts before the original account is closed down to render it untraceable.
How Big Is This Type of Fraud?
NFIB figures show that over £32 million has been reported lost this way in the UK and nearly 1000 frauds of this kind were reported from January 2015 to 2016. Of the £32 reported stolen the victims has so far only been able to recover £1 million. In what is believed to be the largest recorded CEO fraud to date a Financial Controller at the Scottish office of a large healthcare company was conned into transferring £18.5 million into accounts in Hong Kong, China and Tunisia.
What Does This Mean For Your Business?
With this type of fraud it is likely that your business will be a better target for the fraudsters if it is a larger limited company. Crime stats also show that more than 20% of those companies targeted are based in London.