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FBI and IRS warn of pervasive, maddening business, consumer scams

Michael Cooney | Jan. 23, 2015
FBI says man-in-the-middle e-mail scam cost victims US$214 million. IRS says phone scam has 3,000 victims who’ve paid over US$14 million.

Version 2
The e-mail accounts of high-level business executives (CFO, CTO, etc) are compromised. The account may be spoofed or hacked. A request for a wire transfer from the compromised account is made to a second employee within the company who is normally responsible for processing these requests. In some instances a request for a wire transfer from the compromised account is sent directly to the financial institution with instructions to urgently send funds to bank "X" for reason "Y." This particular version has also been referred to as "CEO Fraud," "Business Executive Scam," "Masquerading," and "Financial Industry Wire Frauds."

Version 3
An employee of a business has his/her personal e-mail hacked. Requests for invoice payments to fraudster-controlled bank accounts are sent from this employee's personal e-mail to multiple vendors identified from this employee's contact list. The business may not become aware of the fraudulent requests until they are contacted by their vendors to follow up on the status of their invoice payment.

In the end, the scheme is usually not detected until the company's internal fraud detections alert victims to the request or company executives talk to each other to verify the transfer was made.

Meanwhile the IRS says it is still battling aggressive and threatening phone calls being made by criminals impersonating IRS agents.

The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.

"If someone calls unexpectedly claiming to be from the IRS with aggressive threats if you don't pay immediately, it's a scam artist calling," said IRS Commissioner John Koskinen in a statement. "The first IRS contact with taxpayers is usually through the mail. Taxpayers have rights, and this is not how we do business."

Phone scams in fact for the first time top the Dirty Dozen scam list compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year.

Phone scams top the list this year because it has been a persistent and pervasive problem for many taxpayers for many months. Scammers are able to alter caller ID numbers to make it look like the IRS is calling. They use fake names and bogus IRS badge numbers. They often leave "urgent" callback requests. They prey on the most vulnerable people, such as the elderly, newly arrived immigrants and those whose first language is not English. Scammers have been known to impersonate agents from IRS Criminal Investigation as well.

"These criminals try to scare and shock you into providing personal financial information on the spot while you are off guard," Koskinen said. "Don't be taken in and don't engage these people over the phone."

 

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