Protect Your Company From CEO Fraud With These Tips!

Businesses and their employees are having to be very aware of Internet risks. Cybercriminals have the ability to impersonate real websites, gain people's confidential information, and use sophisticated software or gadgets. One particular case of this where an email scam can be highlighted is the CEO fraud, or BEC (Business Email Compromise) fraud. By the FBI's Internet Crime Complaint Center (IC3) report, CEO fraud is responsible for $26 billion in reported losses between 2016 and 2019.

What is a CEO Fraud and How to Prevent it?

The CEO fraud phishing essentially has four phases:

1. Finding the person to impersonate

In the first stage of cyberattacks, cybercriminals resort to social engineering to reveal the best employee in the company. Normally, this begins with a careful study of new messages the company issues on its website or social media. This includes a post by the CFO about her vacation with her family to a remote locale without use of a phone or laptop.

2. Finding the employee to manipulate

It is critical to identify exactly the right person within a company later on during a CEO fraud attack. Once again, the criminal will concentrate on someone they have recently met and may possibly not know very well.



3. Manipulating the employee

During a cybercriminal's employment, they will make an effort to manipulate them. The cybercriminal will use a spoof email to deliver the message, so the hacker is not going to come from the sender's business address or the private email address CEO's usual communications.

Usually, the email will have a short introductory message. Claim to be very urgent. Ask the employee to keep it confidential. And, will request either sensitive information, or a wire transfer from the employee. Waiting for the employee 's reaction.

4. Waiting for the employee’s reaction

The purpose of sending an urgent and highly confidential email (which can't be explained to others even if you're the CEO of the company) is to get the employee to take the desired action (sending sensitive information, transferring funds, or anything else).

For example, an already very busy worker, who has three other things to do, might just do it without taking a second look at the email and carry on with the more important tasks. Or, a new employee might receive an email like this (not noticing the spoof email address) and see that in that company it is common.

How to Prevent CEO Fraud?

  • Companies who want to ascertain how to safeguard themselves from CEO (chief executive officer) phishing should make a strong internal cyber-risk detection and prevention policy. This policy should encompass all levels of the company from the CEO to the lowest employee, as well as all relevant departments, the HR, accounting and finance.


  • Employee training and fraud awareness training are thus significant aspects for agencies when in doubt regarding suspicious emails like these. In addition, the company also must instruct its employees about its method for soliciting employees for things such as this.

  • It is also a good idea to consider how your employees would react to fake CEO fraud emails. View them as fire drills.

  • The employees have to be trained to initially verify the newly disclosed information with the CEO or any other superior chief, by telephone or in person, or in the same way if the CEO happens to be unavailable. They should not respond to unsolicited communication, regardless of how urgent or crucial it might seem.

  • Employees should be urged to not open suspicious email attachments or click on links and to carefully check emails. They must ensure that the email address is the same as that of the CEO or only resembles it. As an example, the employees' email domain must be correct.

  • Companies must also use multifactor authentication via various channels, such as email filters, to increase the protection of employees from hackers and scammers. For wire transfers in particular, it's important to verify the funds with the person who is receiving them, and push notifications make this easier.

In summary, a CEO fraud is any malicious or fraudulent act performed by a CEO, entrepreneur, or any senior or key personnel of an organization. CEO Frauds have varying forms of corruption including embezzlement, financial statement fraud, and money laundering.