Cyber criminals are tricking CEOs out of millions of dollars by exploiting their organisations poor business processes and fooling unsuspecting employees into transferring money. The growing trend, known as ‘CEO Whaling’, involves plain text e-mails being sent to employees’ responsible financial transactions, masquerading as their boss requesting them to urgently pay invoices. Those falling victim have no way to recover the money with insurance generally not covering international fraud.
These highly organised con artists are not just spamming companies at random, instead they’re using social media to research potential victims, taking advantage when they’re most vulnerable. For example they may identify through social media that the boss or the person responsible for financial transfers is on a holiday and that’s when they strike, sending an e-mail saying they’re about to get on a flight and need an invoice paid urgently. They use a fake e-mail address and include some personal details uncovered via social media to give the e-mail just enough validity to trick the employee into believing it needs to be done and that requesting confirmation will probably make their boss angry due to the delay caused by being on a flight and unable to respond.
Organisations with business processes that rely on an e-mail from the boss for financial approvals are at high risk of falling victim to this scam as the process doesn’t include any validation that the invoice hasn’t been modified or that the approval has come from the person with authority to approving it. Busy people find the use of e-mail in a process like this convenient as they can be sent at will from virtually anywhere, on any device, at any time, putting them at risk of being exploited. Processes that involve printing, stamping, signing and shuffling paper around for approval stall when the approver is not in the same location as the document. Allowing e-mails to be used in place of an actual signature on the document makes the process susceptible to scammers. This issue was recently reported on in The Advertiser, read that article here http://www.adelaidenow.com.au/technology/how-australian-bosses-are-being-tricked-out-of-millions-of-dollars-by-cyber-criminals/news-story/57318e06c02a8215b8d67d521a219aea.
The solution to avoid being tricked by the scammers is to implement a flexible solution like M-Files where the business process is migrated into the system with secure access provided via desktop, web and mobile app. M-Files stores a single electronic version of the invoice with security that restricts access to only the people involved. This avoids copies of the invoice being e-mailed, instead those involved all refer to the same version stored in M-Files. With the approval process managed via workflow, the approver is notified of an invoice to approve and is required to authenticate themselves to view and approve, which can be done quickly a simply via the mobile app using fingerprint authentication. The people responsible for payment are then notified and required to authenticate to access the approved invoice. M-Files keeps a detailed version history of every change the document goes through, so if the person responsible for payment wants validation that the boss approved the invoice for payment, they can review the documents history to confirm it was actually approved by the boss’s user account. The version history can be used to identify changes to the original document and can potentially identify fraud attempts where bank details for payment have been changed on an invoice. Aside from not falling victim to fraud, the benefits of keeping the records electronically rather than physically include incredibly fast retrieval of information and increased office space when you recycle the filing cabinets for scrap metal.
If you’re still using a manual process that involves printing, stamping, signing and shuffling paper around your organisation for approval that can be short circuited by e-mails, you are at risk of being scammed. If you think it won’t happen to you, think again as the Federal Government have been briefed on the severity of this trend because the losses are increasing into the millions. If you want to know more about how M-Files can help your business, please contact us.