Business Email Scam Losses Now Top $12 Billion

The U.S. Federal Bureau of Investigation released a public service announcement this week warning that business email compromise (BEC) scams are on the rise.

The total value of funds redirected as a result of a BEC scam has now topped $12 billion, the FBI said, updating previous warnings of the scam and including data up to May 2018. Between December 2016 and last May there was a 136 percent increase in BEC scam losses across the globe, the FBI said, and instances of the crime have been reported in 150 countries and all 50 U.S. states.

Analysis shows banks in China and Hong Kong are the top destination for redirected funds, stolen when a scammer emails a business by infiltrating a legitimate email account, and requests a transfer of funds or other sensitive data. The emails often appear as legitimate requests, such as, for example, a request for invoice payment from a supplier.

According to the FBI, the Internet Crime Complaint Center (IC3) recorded 41,048 U.S. victims of BEC scams between October 2013 and May 2018, totaling more than $2.9 billion in losses.

The FBI warned that the real estate sector is an increasingly popular target for business email compromise scammers, including total companies, law firms, real estate agents, and property buyers and sellers, the announcement said. Between 2015 and 2017, the real estate market saw a more than 1,100 percent increase in the number of BEC victims.

An announcement by the FBI issued in 2016 pinpointed Hong Kong as ground zero for many business email scams identified. At the time, total losses and attempted losses reached $3.1 billion. At the time, the FBI reported a 1,300 percent increase in the value of losses between January 2015 and June 2016, while reports of BEC scams had increased by 270 percent in the first half of 2016.