CEO Fraud or Business Email Compromise (BEC): What It Is and How to Prevent It

CEO Fraud, also known as Business Email Compromise (BEC), now impacts more than 400 companies daily worldwide.  

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his type of scam, which has reached epidemic levels, not only jeopardizes companies’ finances but also their reputation. With nearly 40% of victims being small and medium-sized enterprises, the impact on global economic growth is alarming, resulting in accumulated losses of $3 billion over the past three years, according to a Symantec study.   

CEO Fraud is one of the most sophisticated and damaging schemes companies face. Its aim is to deceive employees into making money transfers or sharing confidential information, believing they are fulfilling legitimate requests. Below, we’ll explore how this fraud works, the warning signs, and best practices for prevention.   

 What Is CEO Fraud/BEC?   

CEO Fraud or Business Email Compromise (BEC) is a social engineering tactic where cybercriminals impersonate highranking executives, such as the CEO or CFO, to manipulate employeesespecially in financial departmentsinto taking actions harmful to the company.   

Attackers study their targets through social media, corporate websites, or public sources to gather information about organizational hierarchies and internal procedures.   

Using this information, they craft fake emails that mimic an executive’s identity and urgently request actions such as:   

• Money transfers for “overdue invoices.”   

• Sharing confidential data, such as client lists or login credentials.   

• To enhance credibility, they include seemingly legitimate details, such as real names or addresses, and even fabricate entire conversations to make the interaction appear professional.   

For instance, an employee might receive an email that looks genuine, asking them to transfer funds to an external account to settle an overdue payment. In some cases, the CEO can also be the victim, targeted to authorize financial movements in favor of the fraudsters.  

 Indicators of CEO Fraud/BEC   

Although these scams are often highly sophisticated, there are signs that can help identify a potential attack:   

SUSPICIOUS CONTEXT   

•  The request comes from someone with whom there has been little or no previous contact.   

•  The sender uses a formal but generic tone, suggesting the email was intended for multiple recipients.   

ARTIFICIAL URGENCY   

• Phrases like “I need your immediate attention” or “urgent payment for overdue invoice” are used to pressure the recipient into acting without verifying the email’s legitimacy.   

LEGITIMATE BUT IRRELEVANT DATA   

• Emails include valid information (such as addresses or company names) sourced from public records. These details, however, do not guarantee authenticity.   

SUSPICIOUS ATTACHMENTS   

• Files with seemingly legitimate names, such as invoices or tax forms, may contain malware or ransomware.   

FAKE DOMAINS   

• Cybercriminals use domains that closely resemble legitimate ones to deceive recipients. Example: A legitimate domain like example.com might be spoofed as example.co or example.biz.  

• A common tactic involves using unusual extensions, such as “.ru.com,” which may appear authentic but are unrelated to a company’s original domain.   

 How to Prevent CEO Fraud/BEC   

Adopting preventive measures is essential to protect companies from this type of threat. Here are some of the most effective strategies:   

•  Avoid Engaging with Suspicious Emails. Never reply to or download files from emails of uncertain origin. If an email appears legitimate but raises doubts, verify its authenticity before acting.   

• Verify with Official Sources. If the email mentions a company or institution, use official channels (website or phone number) to confirm the legitimacy of the request. 

• Technical Analysis. Review the full email header to identify the IP address and other technical details of the sender. This helps confirm if the email corresponds to the legitimate domain of the alleged company.   

• Notify the Cybersecurity Team. Immediately report suspicious emails to the IT department. This enables preventive measures to safeguard the entire organization.   

• Training and Awareness. Conduct regular cybersecurity training sessions to keep employees alert to these types of scams. Share practical examples of fake emails to help staff recognize them.   

With Nigeria, the United States, and the United Kingdom ranking as the top countries of origin for fraudulent emails, this type of attack reflects its global reach. CEO Fraud/BEC is a serious threat that can cause significant financial losses and reputational damage to companies or financial institutions. However, with preventive measures such as continuous training, strict verification protocols, and early incident reporting, the risk can be minimized.   

In an increasingly vulnerable business environment, fostering a cybersecurity culture and adopting protective technologies is key to staying one step ahead of cybercriminals. Are your systems and employees prepared to identify and combat these threats?   

Contact TrustCloud and learn about our attack-proof platform