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CEO Fraud is on the rise - Victims include business in Northamptonshire

Alert message sent 22/11/2016 08:13:00

Information sent on behalf of Northamptonshire Police

Are your employees aware of ways to protect your company from becoming a victim of this scam?

Action Fraud has seen an increase in reports from businesses that have fallen victim to fraudsters who are purporting to be CEO’s, resulting in huge financial losses.

How does this scam work?
CEO fraud will typically start with an email being sent from a fraudster to a member of staff in a company’s finance department. The member of staff will be told by the fraudster, who is purporting to be a company director or CEO, that they need to quickly transfer money to a certain bank account for a specific reason. The member of staff will do as their boss has instructed, only to find that they have sent money to a fraudster’s bank account. 

The fraudster will normally redistribute this money into other mule accounts and then close down the bank account to make it untraceable. Out of the £32 million reported to be lost by businesses to CEO fraud only £1 million has been able to be recovered by the victims. This is due to businesses taking too long to discover that they have been the victim of fraud and the lost money already being moved by fraudsters into mule accounts. Most businesses reported initially being contacted via emails with and suffixes. 

Businesses should educate their staff
Limited companies tend to be the most targeted type of company with 52% of reports coming from this business type.

Deputy Head of Action Fraud, Steve Proffitt said: “It is important that all businesses are made aware of this type of fraud. We encourage businesses to educate their staff about this type of fraud in order to prevent themselves from becoming the next victim. Employees should be encouraged to double check everything they do and never be rushed into transferring large amounts of money even if they do think that it’s  an important task given to them by their CEO. An increased awareness of this type of fraud amongst businesses will no doubt make it far harder for fraudsters to succeed “.

How can businesses protect themselves: 

  • Ensure all staff, not just finance teams, and know about this fraud. 
  • Have a system in place which allows staff to properly verify contact from their CEO or senior members of staff; for example having two points of contact so that the staff can check that the instruction which they have received from their CEO is legitimate.  
  • Always review financial transactions to check for inconsistencies/errors, such as a misspelt company name.
  • Consider what information is publicly available about the business and whether it needs to be public.
  • Ensure computer systems are secure and that antivirus software is up to date.

To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use their online fraud reporting tool.

Message sent by
Suzie Fletcher (Police, Crime Prevention, Administrator, FHQ)

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