Are you taking steps to protect your business and personal information online? Identity theft continues to be one of the fastest growing crimes in the United States.

Please take a few minutes to review the business and personal fraud prevention guidelines below to learn how you can be proactive in the fight against online fraud.

User ID and Password Guidelines

  • Create a "strong" password with at least eight characters that includes a combination of mixed case letters, numbers, and special characters.
  • Change your password frequently.
  • Never share user name and password information with third-party providers.
  • Avoid using an automatic login feature that saves user names and passwords.

Business e-mail Compromise

Source: https://www.ic3.gov/media/2015/150122.aspx

The Business E-mail Compromise (BEC) is a sophisticated scam targeting businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. Formerly known as the Man-in-the-E-mail Scam, the BEC was renamed to focus on the "business angle" of this scam and to avoid confusion with another unrelated scam. The fraudulent wire transfer payments sent to foreign banks may be transferred several times but are quickly dispersed. Asian banks, located in China and Hong Kong, are the most commonly reported ending destination for these fraudulent transfers.

The victims of the BEC scam range from small to large businesses. These businesses may purchase or supply a variety of goods, such as textiles, furniture, food, and pharmaceuticals. This scam impacts both ends of the supply chain, as both supplies and money can be lost and business relations may be damaged.

It is still largely unknown how victims are selected; however, the subjects monitor and study their selected victims prior to initiating the BEC scam. The subjects are able to accurately identify the individuals and protocol necessary to perform wire transfers within a specific business environment. Victims may also first receive "phishing" e-mails requesting additional details of the business or individual being targeted (name, travel dates, etc). Some victims reported being a victim of various Scareware or Ransomware cyber intrusions, immediately preceding a BEC scam request.

VERSIONS OF THE BEC SCAM

Based on IC3 complaints and other complaint data received since 2009, there are three main versions of this scam:

Version 1

A business, which often has a long standing relationship with a supplier, is asked to wire funds for invoice payment to an alternate, fraudulent account. The request may be made via telephone, facsimile or e-mail. If an e-mail is received, the subject will spoof the e-mail request so it appears very similar to a legitimate account and would take very close scrutiny to determine it was fraudulent. Likewise, if a facsimile or telephone call is received, it will closely mimic a legitimate request. This particular version has also been referred to as "The Bogus Invoice Scheme," "The Supplier Swindle," and "Invoice Modification Scheme."

Version 2

The e-mail accounts of high-level business executives (CFO, CTO, etc) are compromised. The account may be spoofed or hacked. A request for a wire transfer from the compromised account is made to a second employee within the company who is normally responsible for processing these requests. In some instances a request for a wire transfer from the compromised account is sent directly to the financial institution with instructions to urgently send funds to bank "X" for reason "Y." This particular version has also been referred to as "CEO Fraud," "Business Executive Scam," "Masquerading," and "Financial Industry Wire Frauds."

Version 3

An employee of a business has his/her personal e-mail hacked. Requests for invoice payments to fraudster-controlled bank accounts are sent from this employee's personal e-mail to multiple vendors identified from this employee's contact list. The business may not become aware of the fraudulent requests until they are contacted by their vendors to follow up on the status of their invoice payment.

CHARACTERISTICS OF BEC COMPLAINTS

The IC3 has noted the following characteristics of BEC complaints:

  • Businesses and personnel using open source e-mail are most targeted.
  • Individuals responsible for handling wire transfers within a specific business are targeted.
  • Spoofed e-mails very closely mimic a legitimate e-mail request.
  • Hacked e-mails often occur with a personal e-mail account.
  • Fraudulent e-mail requests for a wire transfer are well-worded, specific to the business being victimized, and do not raise suspicions to the legitimacy of the request.
  • The phrases "code to admin expenses" or "urgent wire transfer" were reported by victims in some of the fraudulent e-mail requests.
  • The amount of the fraudulent wire transfer request is business specific; therefore, dollar amounts requested are similar to normal business transaction amounts so as to not raise doubt.
  • Fraudulent e-mails received have coincided with business travel dates for executives whose e-mails were spoofed.
  • Victims report that IP addresses frequently trace back to free domain registrars.

SUGGESTIONS FOR PROTECTION

The IC3 suggests the following measures to help protect you and your business from becoming victims of the BEC scam:

  • Avoid Free Web-Based E-mail: Establish a company web site domain and use it to establish company e-mail accounts in lieu of free, web-based accounts.
  • Be careful what is posted to social media and company websites, especially job duties/descriptions, hierarchal information, and out of office details.
  • Be suspicious of requests for secrecy or pressure to take action quickly.
  • Consider additional IT and Financial security procedures and 2-step verification processes. For example -
    • Out of Band Communication: Establish other communication channels, such as telephone calls, to verify significant transactions. Arrange this second-factor authentication early in the relationship and outside the e-mail environment to avoid interception by a hacker.
    • Digital Signatures: Both entities on either side of transactions should use digital signatures. However, this will not work with web-based e-mail accounts. Additionally, some countries ban or limit the use of encryption.
    • Delete Spam: Immediately delete unsolicited e-mail (spam) from unknown parties. Do NOT open spam e-mail, click on links in the e-mail, or open attachments. These often contain malware that will give subjects access to your computer system.
    • Forward vs. Reply: Do not use the "Reply" option to respond to any business e-mails. Instead, use the "Forward" option and either type in the correct e-mail address or select it from the e-mail address book to ensure the intended recipient's correct e-mail address is used.
  • Significant Changes: Beware of sudden changes in business practices. For example, if a current business contact suddenly asks to be contacted via their personal e-mail address when all previous official correspondence has been on a company e-mail, the request could be fraudulent. Always verify via other channels that you are still communicating with your legitimate business partner.

General Guidelines

  • Do not use public or other unsecured computers for logging into Consumer eBanking.
  • Check the last login date/time every time you log in.
  • If the system does not recognize your computer or location, you will be asked to provide additional information to log into Consumer eBanking. This may include Out-of-Band Authentication via phone or SMS text message or answering more sophisticated (Out-of-Wallet) challenge questions.
  • Review account balances and detail transactions regularly (preferably daily) to confirm payment and other transaction data and immediately report any suspicious transactions to your financial institution.
  • View transfer history available by viewing account activity information.
  • Whenever possible, use Bill Pay instead of checks to limit account number exposure and to obtain better electronic record keeping.
  • Take advantage of and regularly view system alerts; examples include:
  • Balance alerts
  • Password change alerts
  • Transfer alerts
  • Do not use account numbers, your social security number, or other account or personal information when creating account nicknames or other titles.
  • Use the historical reporting features of your online banking application on a regular basis to confirm payment and other transaction data.
  • Never leave a computer unattended while using Consumer eBanking.
  • Never conduct banking transactions while multiple browsers are open on your computer.

Customer Awareness/Phishing

Silvergate Bank will NEVER request personal information by phone, email, or text message including account numbers, personal identification information, passwords, or any other confidential customer information. Below are some points to remember:

  • Do not give your login credentials to anyone. If you are contacted by someone who states they are calling from the Bank or you receive an email, you should not give them any information. You should contact the Bank in the event you notice suspicious account activity or experience customer information security-related events.
  • Never provide Personal Financial Information including your Social Security number, account number or passwords, over the phone or the Internet if you did not initiate the contact.
  • Never click in the link provided in an email you believe is fraudulent. It may contain some type of malicious software that can contaminate your computer.
  • Do not be intimidated by an email or caller who suggests dire consequences if you do not immediately provide or verify financial information.
  • If you believe the contact is legitimate, go to the Bank's website by typing in the site address directly or using a page you have previously bookmarked, instead of a link provided in the email.
  • If you fall victim to an attack, act immediately to protect yourself. Alert the Bank as soon as possible. Place fraud alerts on your credit files. Monitor your credit files and monthly statements very closely.
  • Report suspicious emails or calls to the Federal Trade Commission through the Internet at http://www.consumer.gov/idtheft, or by calling 1-877-ID-THEFT.

Protecting Your Business

It is suggested that commercial online banking customers perform risk assessments and controls evaluations periodically to help identify potential threats and to determine the strength of their controls. This can be done as follows:

  • Identify possible risks in the online banking environment. Reference: http://www.ic3.gov/media/2010/corporateaccounttakeover.pdf
  • Educate your employees on the risks.
  • Create and maintain proper user account controls.
  • Review all transactions.
  • Install and maintain proper antivirus/security software on all systems/networks that access online banking.

Customer Contact Information in the Event of Suspicious Activity:

Tips to Avoid Phishing, Spyware and Malware

  • Do not open e-mail from unknown sources. Be suspicious of e-mails purporting to be from a financial institution, government department, or other agency requesting account information, account verification, or banking access credentials such as user names, passwords, PIN codes, and similar information. Opening file attachments or clicking on web links in suspicious e-mails could expose your system to malicious code that could hijack your computer.
  • Never respond to a suspicious e-mail or click on any hyperlink embedded in a suspicious e-mail.
  • Call the purported source if you are unsure who sent an e-mail.
  • If an e-mail claiming to be from your financial organization seems suspicious, check with your financial organization.
  • Install anti-virus and spyware detection software on all computer systems. Free software may not provide protection against the latest threats compared with an industry standard product.
  • Update all of your computers regularly with the latest versions and patches of both anti-virus and anti-spyware software.
  • Ensure computers are patched regularly, particularly operating systems, browsers, and key applications.
  • Install a dedicated, actively managed firewall, especially if using a broadband or dedicated connection to the Internet, such as DSL or cable. A firewall limits the potential for unauthorized access to your network and computers.
  • Check your settings and select, at least, a medium level of security for your browsers.
  • Clear the browser cache before starting any Consumer eBanking session to eliminate copies of web pages that have been stored on the hard drive. How the cache is cleared depends on the browser and version you are using. This function is generally found in the browser's preferences menu.
  • Be advised that you will never be presented with a maintenance page after entering login credentials. Legitimate maintenance pages are displayed when first reaching the URL and before entering login credentials.
  • Consumer eBanking does not use pop-up windows to display login messages or errors. They are displayed directly on the login screen.
  • Consumer eBanking never displays pop-up messages indicating that you cannot use your current browser.
  • Consumer eBanking error messages never include an amount of time to wait before trying to login again.
  • Be advised that repeatedly being asked to enter your user ID or password are signs of potentially harmful activity.

Tips for Wireless Network Management

Wireless networks can provide an unintended open door to your network. Unless a valid business reason exists for wireless network use, it is recommended that all wireless networks be disabled. If a wireless network is to be used for legitimate business purposes, it is recommended that wireless networks be secured as follows:

  • Change the wireless network hardware (router/access point) administrative password from the factory default to a complex password. Save the password in a secure location as it will be needed to make future changes to the device.
  • Disable remote administration of the wireless network hardware (router/access point).
  • If possible, disable broadcasting the network SSID.
  • If your device offers WPA encryption, secure your wireless network by enabling WPA encryption of the wireless network. If your device does not support WPA encryption, enable WEP encryption.
  • If only known computers will access the wireless network, consider enabling MAC filtering on the network hardware. Every computer network card is assigned a unique MAC address. MAC filtering will only allow computers with permitted MAC addresses access to the wireless network.