Recognizing & Avoiding Scams

This week’s Scam Report will focus on Business Email Compromise Scams (BEC), which have tripled in the last three years, resulting in more financial losses than any other fraud type in the U.S. It’s when a fraudster uses a compromised email account to insert himself into a transaction where two parties are exchanging money. The broad consensus among law enforcement and internet security companies is that 90 percent of BEC groups operate out of Nigeria.

Here’s how the scam typically works. You receive an email which appears to come from the head of a company. For example, a fraudster manages to hack into your boss’s account, so it looks like the emails you receive are coming from her.

The main way a fraudster gets into someone else’s account is through an email that asks the receiver to click on a link. If the link is clicked on, the crook can insert malware and gain access. Sometimes they get access to many accounts this way, for example if they hack into a company’s payroll records.

Deputy District Attorney Vicki Johnson and Richard Copelan, CEO/President of the BBB of the Tri-Counties, report that the BEC Scam has been affecting real estate transactions, small businesses, and even individuals in Santa Barbara County.

The BEC Scam and Real Estate Transactions

Here’s how it works. A hacker gets into an escrow officer’s email. The savvy crook sits back for a while, watching messages go back and forth between buyer and seller and their representatives, while learning the language specific to the company they are targeting. When the sale is about to be finalized, the hacker, pretending to be the escrow officer, instructs the bank to release the funds and will provide the account information for the deposit. Within hours or days, that money is gone and in the fraudster’s account.

Here’s a quote from an FBI special agent who works these cases: “…the perpetrators leave a long wake of financial and emotional damage, stealing money from small businesses – leaving them unable to pay bills, and from families in the process of buying a home, all but erasing their dreams of home ownership.”

The BEC Scam and Small Businesses

A scammer recently hacked into a business account, pretending to be the owner of a Santa Barbara company. When the accountant received email instructions to pay an invoice, she wired several thousand dollars to an account controlled by a crook before realizing that the invoice was fake.

Con-Artists Use this Scam to Rip off Individuals, Too

A Santa Barbara woman received an email from someone she thought was her uncle. He said he was very sick and needed immediate funds for emergency surgery. Since the email contained a lot of believable details, the woman thought it was real and wired $20,000 into the crook’s account.

BBB advises us to always use the telephone to confirm requests before acting. Most BEC fraud could be stopped if those directed to send money simply called the person who’s supposedly asking them to send the money.

To report a scam, call the District Attorney’s Fraud Hotline at 805-568-2442. The Better Business Bureau urges you to visit their Scam Tracker site at https://www.bbb.org/scamtracker/santa-barbara/reportscam or call them directly at 805-963-8657.

The District Attorney’s office and Better Business Bureau of the Tri-Counties each have segments on the Young at Heart Radio Show, with host Patti Teel. It airs on KTMS Newstalk 990 on Saturdays at 5:30 pm and Sunday mornings at 8:30. During Scam Squad, Deputy District Attorney Vicki Johnson warns listeners about the latest scams and often interviews victims. This is followed by Your Moment of Trust, a segment by BBB of the Tri-Counties – providing timely advice to businesses and individuals. After airing, theycan be found at www.hubforpodcasting.com.