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46 June | 2023 Business Costly Fraud While our opening story has a happy ending, most businesses targeted by so-called "Business Email Compromise" (BEC) fraud are not so lucky. Of the 11 percent of respondents reporting losing money to such fraud in a recent survey by AP Now, a source of accounts-payable information for the business and finance community based in Newark, Del., only 3.2 percent recovered all the stolen funds. The fraud is increasing rapidly as thieves have learned to cleverly disguise C-level executives' identities. "Crooks know it's very easy for people to miss slight changes in email addresses," says Mary S. Schaeffer, AP Now's president. The urgent need for effective security procedures was brought home recently by an upsurge in news reports about an especially insidious form of electronic theft: ransomware attacks (more on this later). And reports from the FBI, the IRS and other agencies show that cyber fraud of all kinds poses a growing threat to companies, including small businesses, such as florists. Many thieves are after money, but others want data such as company marketing plans or customer information for identity theft. "Criminals often target smaller businesses because their protections are typically not as strong," Schaeffer notes. "They are likely to have older, technology and lack the security personnel to keep software updated." Fueling the rise in cyber fraud is the growing digitalization of business transactions, a long-term trend given further impetus by a greater reliance on electronic communications "Criminals often target smaller businesses because their protections are typically not as strong." during the COVID-19 pandemic. "Flaws in firewalls and Virtual Private Networks (VPNs), as well as in videoconferencing systems, have exposed more businesses to incursions," says Robert M. Travisano, an attorney at Epstein Becker Green in New Jersey and New York. The rapid expansion of devices on the typical employer's computer network has given cyber actors still more opportunities. The pandemic has increased risk in another way : "More people are working at home, sharing business computers with family members," says Eric Jackson, a consulting member of the cybersecurity team at Withum, a business advisory firm based in Princeton, N.J. "This has created some serious security breaches." Users not only log onto malware-infested sites they would not access at work but family members also may accidentally open email attachments that install damaging programs. Electronic Payments Wire transfers and ACH (Automated Clearing House) transactions are juicy targets for cyber thieves as the business world moves away from paper checks. "The right procedures can help spot electronic payment fraud before the money goes out the door," says Schaeffer. "That's much better than trying to recover what's been lost."

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