B2B Payments

FBI Pinpoints 'Ground Zero' For Supplier Email Scams


The Federal Bureau of Investigation has been targeting the Business Email Compromise for years, warning companies to be aware of fake supplier emails and invoices requesting firms to wire funds.

A new notice from the FBI continues its crackdown of the scheme and pinpoints what reports call "ground zero" for the scam.

According to reports published on Tuesday (July 19), Hong Kong is the epicenter of these business email scams, with fraudsters already nabbing (or attempting to steal) $3.1 billion from unsuspecting companies. Cyberthieves email a company, generally in the U.S. or Europe, that already has relationships with suppliers or brokers in Hong Kong. The email requests a wire transfer for goods or services, with a convincing enough note to not raise suspicion, and then, payment is made.

It's only until the company realizes that whatever it paid for has not arrived that the scam is revealed. According to reports, funds wired are rarely recovered.

The FBI has dubbed the Business Email Compromise a "super swindle" due to the value of money already stolen through the scam. According to authorities, there has been a 1,300 percent increase in losses since Jan. 2015. Businesses across 100 countries have been affected; reports of the scam in 2016 are already up by 270 percent.

Authorities say cybercriminals are becoming more sophisticated with the crime, too, with rising instances of executives at legitimate trading companies having their emails hacked to send the requests for payment.

Reports said China and Hong Kong have become key hubs for these scammers because of their large trade finance booking markets. "While a victim company would never respond to a fund-transfer request from, say, Adeola Ibrahim in Lagos, Nigeria, they may not think twice when it comes (apparently) from Prudence Lai, their regular trade agent based in Kwun Tong," reports by South China Morning Post, written by FTI Consulting Director Jane Moir, stated. "As such, Hong Kong's just-in-time trade management sector is vulnerable to being hijacked."

Plus, reports added, Hong Kong has had issues with money laundering after authorities in 2012 stated the city was noncompliant due to a lack of controls when funds are transacted across borders.



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