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Payment Diversion Fraud - expert views

Jon Shilland of the National Economic Crime Centre (NECC) & Andy Baguley City of London Police are experts in Payment Diversion Fraud. They know what you need to know, and how to protect yourself.



Jon Shilland of the NECC says:


We’re all familiar with fraudulent emails that often litter our inboxes. With far-fetched promises about winning a Ferrari, or inheriting millions from a long-lost relative in a distant country, these attempted scams are often straightforward enough to see through.
Other fraud types are more insidious, and involve criminals deliberately targeting a specific individual. Payment Diversion Fraud (PDF) is a key example of this personalised, calculated crime.
PDF, also known as Business Email Compromise (BEC) or Mandate Fraud, involves criminals impersonating others, creating or amending invoices and diverting payments to bank accounts under their own control. This can target both businesses and individuals.

Why is PDF important and why now?


Andy Baguley of City of London Police adds:


PDF is a significant threat to the UK economy with reported losses of around £152m in the year to September 2021, and over 4,600 individual cases. Businesses are particularly impacted by annual spikes in PDF that normally occur in March and November, and are associated with financial year-ends.
PDF has been increasing and this trend is predicted to grow because of increased business activity associated with relaxing of Covid-19 restrictions, alongside the increased sophistication of fraudsters involved in PDF.
PDF affects all types of businesses and individuals. However, due to the targeted nature of this fraud type, small and medium sized businesses, which often have less comprehensive IT security, are particularly vulnerable. In addition, individuals that are purchasing houses and are involved in large financial transactions are also at risk. These two victim groups should be particularly vigilant to protect themselves against PDF.


Case study: City firm loses 340k after top PA’s email is forged


A City of London firm found 30 fake invoices that purported to have been approved for

payment to 21 different bank accounts to a total of £670,000.


All of the invoices appeared to be from the Personal Assistant (PA) to the company’s

CEO, and had been sent to the Accounts Payable group e-mail box with authorisation for

urgent payment. All of these invoices were processed by the same member of the

accounts team. While the company was able to stop some of the payments, this

successful fraud resulted in a loss of approximately £340,000.


After the victim company became aware of the fraud, internal enquiries established that

the e-mails purporting to be from the PA to the CEO were, in fact, ‘spoofs’, sent via a

Czech-based spoofing website which helps criminals forge sender email addresses.


Additional enquiries established that the invoices were processed within minutes of their

arrival to the accounts inbox, in contrast to normal working practices of processing

similar invoices at least a day after.


Protect yourself and your business against PDF, by identifying the following red flags of PDF:


  • Have you been asked to urgently process a payment that is large or unusual?

  • Have you been asked to change the bank details of an existing supplier or to set

  • up a new supplier?

  • Is the language used in the email inconsistent with that of the genuine sender?

  • Does the body of the email or email address contain spelling mistakes?


If you have any doubt about the transaction then do not transfer the money.


Protect yourself by double-checking the payment request via an additional

method using details from another source (such as text message, a phone call

or in-person).


If you think you may have already been a victim of PDF, act fast! Immediately

reporting the incident to your bank and Action Fraud (0300 1234 2040 or

www.actionfraud.police.uk) gives you the best chance of recovering your funds.


Please visit the below webpage to download a Fact Sheet with further key advice/steps

on how to protect yourself and your organisation from PDF:


Businesses:


Downloadable PDF fact sheet

Action Fraud PDF home page


Individuals:


Conveyancing Fraud flyer




Reporting

Report all Fraud and Cybercrime to Action Fraud by calling 0300 123 2040 or online. Forward suspicious emails to report@phishing.gov.uk. Report SMS scams by forwarding the original message to 7726 (spells SPAM on the keypad).


The contents of blog posts on this website are provided for general information only and are not intended to replace specific professional advice relevant to your situation. The intention of East Midlands Cyber Resilience Centre (EMCRC) is to encourage cyber resilience by raising issues and disseminating information on the experiences and initiatives of others. Articles on the website cannot by their nature be comprehensive and may not reflect most recent legislation, practice, or application to your circumstances. EMCRC provides affordable services and Trusted Partners if you need specific support. For specific questions please contact us by email.

 

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