Magazine article Business Credit

Online Fraud Schemes Continue to Play on Trust, Lack of Verification

Magazine article Business Credit

Online Fraud Schemes Continue to Play on Trust, Lack of Verification

Article excerpt

Identity theft and social engineering are among payment scams that are neither new nor particularly complicated. Whether fraud perpetrators target consumers or companies involved in what they think are B2B transactions, attempts to collect money continue. In the process, these practices besmirch the good name of organizations, with even the National Association of Business Economics (NABE) and National Association of Credit Management (NACM) among recent victims through no fault of their own.

"Cyber intrusion, where bad actors pretend to be your company, is only getting worse," said Tonya Matney, a special agent with the Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations. "They have just enough information through social engineering. Funds get wired to their account, which employees believe is part of an ongoing project, and they'll steal their money."

"Social engineering, in one form or another, has been out there for a long time," said Katy Jacob, of the Federal Reserve Bank of Minneapolis' Payments Information and Outreach Office. "I think that as folks come up with new ways of combating fraud, they are coming up with new ways to perpetrate."

In 2014, 62% of domestic companies were affected by payment fraud, according to research conducted by the Association for Financial Professionals and JPMorgan Chase & Co. Federal Trade Commission research unveiled in 2015 showed that, among 30 types of fraud complaints, the top three--identity theft, debt collection schemes and imposter scams--accounted for more than one-third of all reported incidents. Businesses with otherwise sterling reputations are finding themselves fielding complaints, some of which end up with the Better Business Bureau or Attorneys General offices in various states. Once the business customer clicks on an email link, often to accounts through Gmail or Outlook rather than a company's "com" or "org" domain, or takes a phone call and provides information without checking the source, the process of fraud is off and running. As simple as such attempts sound and despite all the warnings about scams over the years, such schemes continue to be alarmingly successful.

One recent example occurred in late July when scammers posed as "conference housing planners" and began contacting members of NABE to inform them that hotel rooms for the association's annual meeting were in low supply. The callers then encouraged members to make a reservation on the spot. NABE confirmed those calls are part of a scam and warned potential attendees not to provide credit card or other information to cold-callers going forward.

In a different way, NACM became a target as well. Several times in the past year, perpetrators have fraudulently contacted potential customers while identifying themselves as a NACM's collections-based venture and used email addresses with no connection to our trade association, such as "nacm.loanrecovery@gmail.com." The unknown actors are not connected with NACM-National. There are often clues within such emails that should raise red flags. "No collection agency worth its salt sends you something from a Gmail account," said NACM President Robin Schauseil, CAE. "That's something people need to be careful to consider before giving information or sending any kind of payment." Schauseil urged anyone with information about any of these attempts to contact NACM about the source of information they receive. …

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