What is Business Email Compromise (BEC)? How to Prevent It?

Business Email Compromise (BEC) is a cyberattack where attackers pose as trusted contacts to trick employees into sending money or disclosing confidential information.

Business Email Compromise (BEC) is a sophisticated cyber threat where attackers exploit email systems to deceive individuals into transferring funds or sensitive information. The latest data underscores the significant impact of BEC attacks:

Between June 2016 and December 2021, BEC-related losses amounted to $43 billion globally.

In 2022, the FBI's Recovery Asset Team initiated the Financial Fraud Kill Chain on 2,838 BEC complaints involving domestic transactions with potential losses exceeding $590 million.

In 2016, the Austrian aerospace firm FACC AG was defrauded of €42 million ($47 million) through a BEC attack, leading to the dismissal of both the CFO and CEO.

These statistics highlight the escalating threat of BEC attacks and the critical need for robust cybersecurity measures.

These attacks can cause significant financial losses, data breaches and damage to a company’s reputation. For example, in 2022, city employees in Lexington mistakenly sent $4 million in federal funds to a fraudulent account due to a BEC attack. This incident highlights the need for robust prevention measures such as employee training, multi-factor authentication (MFA), and advanced email security protocols. Implementing these measures helps protect businesses from these costly threats.

This blog post delves into Business Email Compromise (BEC) scams, detailing their types and techniques and offering business email compromise prevention measures. Additionally, it highlights how Keepnet solutions can enhance an organization's cybersecurity and protect against BEC phishing threats.

What is Business Email Compromise (BEC)?

Business Email Compromise (BEC) is a cybercrime where attackers impersonate a legitimate business or person to trick employees into transferring money or sensitive information.

Common techniques include CEO fraud, where attackers pose as executives, and account compromise, where hackers gain control of an executive's email.

Additionally, attackers may use attorney impersonation and data theft, targeting HR or finance departments.

BEC primarily targets finance departments, human resources, and executives. The consequences of BEC attacks are severe, leading to financial loss, data breaches, reputational damage, and legal penalties.

Companies need to be vigilant and implement robust security measures to prevent falling victim to these sophisticated BEC scams.

How to Prevent Business Email Compromise (BEC)?

With cybercriminals constantly evolving their tactics, securing your business from BEC phishing is critical to maintaining security and trust. To effectively protect your business from Business Email Compromise (BEC), implement the following robust strategies:

• Employee Training: Regularly train employees to identify phishing attempts, recognize suspicious emails, and understand BEC tactics using real-world examples and simulations.
• Multi Factor Authentication: Require MFA for accessing email accounts and critical systems, adding an additional security layer beyond just passwords.
• Verification Protocols: Implement strict verification for financial transactions, requiring secondary confirmation methods like phone calls.
• Email Security: Use advanced email security solutions and protocols like SPF, DKIM, and DMARC. Regularly update and review email filtering rules.
• Access Controls: Restrict access to sensitive information based on roles, use strong, unique passwords, and implement role-based access controls (RBAC).
• Update Systems: Keep all software, including email clients, operating systems, and security tools, up to date with patches. Regularly audit systems to identify security gaps.
• Incident Response Plan: Develop a BEC-specific response plan that includes isolating systems, preserving evidence, notifying stakeholders, and recovering accounts. Regularly practice the plan with all employees.

What Types of Business Email Compromise?

Business Email Compromise (BEC) involves various tactics used by cybercriminals to deceive businesses and steal money or sensitive information. Recognizing these types of BEC attacks is significant for implementing effective security measures.

Here are the main types of BEC:

Table 1: The main types of BEC attacks.

Techniques for Business Email Compromise?

Business Email Compromise (BEC) involves several sophisticated techniques used by cybercriminals to deceive businesses and gain access to sensitive information or financial assets.

These methods include spear-phishing, malware, email spoofing, social engineering, account compromise, and man-in-the-middle attacks. The key techniques used in BEC are spear-phishing and malware:

Spear-phishing

Attackers send targeted, deceptive emails to specific individuals within a company, tricking them into revealing sensitive information or performing unauthorized actions.

These emails often appear to come from a trusted source within the organization, such as a senior executive or a known business partner.

The content of these emails is designed to seem legitimate and urgent, encouraging a quick response. By exploiting trust and urgency, attackers can gain access to login credentials, financial information, or other sensitive data.

Malware

Attackers use malicious software to infect a victim's computer, gain access to their email accounts, monitor communications, and steal or manipulate sensitive data.

This malware can be delivered through phishing emails, malicious attachments, or compromised websites. Once installed, the malware can record everything the user types, take screenshots, and steal data without the user knowing.

This allows attackers to watch internal communications and use any information they gather for their own purposes.

How Do Business Email Compromise (BEC) Attacks Work?

Business Email Compromise (BEC) attacks work by first identifying potential targets within a company, such as executives or finance staff.

Once targets are identified, attackers either spoof a legitimate email address or compromise an actual email account through phishing or malware.

Using the compromised or spoofed email, they send a carefully crafted message that appears to come from a trusted source, often with a sense of urgency or confidentiality.

This deceptive email manipulates the recipient into taking specific actions, such as transferring funds or sharing sensitive information.

Believing the email to be legitimate, the recipient follows the instructions, leading to financial loss, data breaches, or further system access. Finally, attackers use the stolen information or money for personal profit or other criminal activities.

Watch the video below to see a real case example of Business Email Compromise (BEC) in action and learn how it works.

Who Are The Typical Targets of BEC Scams?

Typical targets of Business Email Compromise (BEC) scams are individuals who either have access to sensitive information or the authority to conduct financial transactions, making them especially valuable to attackers. These targets include:

1. Executives and CEOs: High-ranking officials whose emails are often trusted and acted upon without question.
2. Finance and Accounting Departments: Employees responsible for processing invoices, payments, and financial transactions.
3. Human Resources Departments: Staff who handle sensitive employee information and payroll data.
4. IT Departments: Personnel with access to company systems and security protocols.
5. Vendors and Suppliers: External partners who regularly conduct business transactions with the company.

How to Recognize BEC Emails?

To recognize Business Email Compromise (BEC) emails, it's important to be aware of common red flags that indicate a potential scam. Look for the following signs:

Table Table 2: The list of red flags to recognize BEC phishing emails.

Why is Business Email Compromise Important?

Business Email Compromise (BEC) is important because it poses severe negative consequences for organizations.

These include substantial financial losses, as employees can be tricked into transferring large sums of money to attackers.

BEC attacks also lead to data breaches, compromising sensitive information that can be exploited further. This can significantly damage a company’s reputation, reducing customer trust and making it difficult to maintain business relationships.

Additionally, businesses may face legal and regulatory penalties if compromised data includes protected personal information.

The highly targeted and deceptive nature of BEC attacks often allows them to bypass traditional security measures, making them particularly dangerous.

Implementing regular employee training, establishing strict verification protocols, and using advanced email security tools are critical to mitigating these risks.

Prevent Risks with Solutions from Keepnet

Keepnet offers effective solutions, such as the Phishing Simulator and Security Awareness Training, to mitigate these social engineering BEC threats and foster a security-aware culture within your organization.

The Keepnet Phishing Simulator helps organizations by creating realistic phishing scenarios, providing a practical method for testing and training employee responsiveness to real-world phishing attacks.

Keepnet Phishing Simulation assists businesses in achieving a 90% reduction in high-risk security behaviors, making their workforce more vigilant against phishing attempts.

By boosting phishing reporting by up to 92%, the Phishing Simulator ensures that employees are alert in recognizing and reporting suspicious activities, significantly enhancing overall security awareness.

Building on the effectiveness of the Phishing Simulator, Keepnet Security Awareness Training further strengthens an organization's defenses against BEC risks. This comprehensive platform offers over 2000 training modules from 12 content providers tailored to specific needs.

The behavior-based training feature uses realistic phishing tests to find and fix user mistakes. This helps employees learn good security practices, avoid future human errors, and potentially save organizations up to $1 million annually.

All of these measures help build the necessary cyber skills that employees need to safeguard sensitive data and prevent BEC phishing.

Keepnet’s Phishing Simulator and Security Awareness Training provide businesses with key business email compromise prevention tools to enhance their security and comply with industry regulations.

Watch the videos below to learn how Keepnet Phishing Simulator and Security Awareness Training can assist your organization in preventing BEC risks.

Editor's Note: This blog was updated on December 9, 2024.