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Protecting Your Business from funds Transfer Fraud

No industry is exempt from cyber crime. As hackers devise plans to obtain sensitive information about business transactions, business owners and employees need to take particular interest in cyber security to protect their clients, partners and themselves from Funds Transfer Fraud. 

Check out our #RiskyBusiness video for tips on protecting your business from Funds Transfer Fraud. 

What is Funds Transfer Fraud?

In instances of Funds Transfer Fraud, a common ploy involves hackers breaking into an employee’s email account to obtain details about upcoming transactions. Once the hackers have all the information they need, they send an email to the employee, pretending to be a representative of the company or client your business is working with.

In the email to the employee, the hackers may state that there has been a change in the instructions and that the employee needs to follow new wire instructions listed in the email. If the employee falls victim to the scam and wires money to the fraudulent account, they’re unlikely to see the money again.

Red Flags

A potential indicator of Funds Transfer Fraud is an email that makes any reference to a Society for Worldwide Interbank Financial Telecommunication (SWIFT) wire transfer, which is sent via the SWIFT international payment network and indicates an overseas destination for the funds.

However, since the emails tend to include detailed information pertaining to the transaction—due to the perpetrator having access to the employee’s email account—many people make the mistake of assuming the email is from a legitimate source. The email addresses often appear to be legitimate, either because the hacker has managed to create a fake email account using the name of the company or because they’ve hacked the company’s actual email account.

How to Avoid Funds Transfer Fraud 

Funds Transfer Fraud is one of many types of online fraud targeting businesses and their clients. To prevent cyber crime from occurring, every party involved in a transaction needs to implement and follow a series of security measures that include the following:  

  • Never send wire transfer information, or any type of sensitive information, via email. This includes all types of financial information, not just wire instructions.
  • Inform clients about your email and communication practices, and explain that you will never expect them to send sensitive information via email.

  • If wiring funds, first contact the recipient using a verified phone number to confirm that the wiring information is accurate. The phone number should be obtained by a reliable source—email is not one of them.

  • If email is the only method available for sending information about a transaction, make sure it is encrypted

  • Delete old emails regularly, as they may reveal information that hackers can use.  

  • Change usernames and passwords on a regular basis, and make sure that they’re difficult to guess.

  • Make sure anti-virus technology is up to date, and that firewalls are installed and working.

  • Never open suspicious emails. If the email has already been opened, never click on any links in the email, open any attachments or reply to the email.

  • Train employees to review all emails carefully before responding or clicking on links, and to report anything suspicious. This includes checking that the email address of the sender is correct.

If You've Been Hacked

Take the following steps if you suspect that your email, or any type of account, has been hacked:

  • Immediately change all usernames and passwords associated with any account that may have been compromised.
  • Contact anyone who may have been exposed to the attack so they too can change their usernames and passwords. Remind them to avoid complying with any requests for financial information that come from an unverified source.  

  • Report fraudulent activity to the FBI via the Internet Crime Complaint Center at

Contact VGM Insurance today for more information on keeping your business safe from cyber crime, and to ensure you have adequate coverage in place.


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