Fraud perpetrators are always finding novel ways to steal from businesses. Owners and managers need to stay atop the latest fraud schemes to fortify their companies’ defenses against fraud losses. This article discusses three recent scams: 1) social media influencer shakedowns, 2) corporate impersonation for use in phishing schemes, and 3) business email compromise targeting remote workers.
Social media influencer shakedowns
It’s common nowadays for so-called social media “influencers” to receive complimentary goods and services from businesses in exchange for free publicity on social media platforms. For example, a restaurant might offer free meals and drinks to an influencer in exchange for promoting the business on Tik-Tok posts. However, some less ethical influencers may rack up big bills, not pay them and fail to post anything about the businesses. Others may accept money for “exposure packages” (to place a certain number of posts on various platforms) and then never deliver.
What should business owners do if influencers approach them for freebies? First, they should verify that the influencer has the number of followers claimed and that the person regularly publicizes local businesses on social media. In addition, they should consider asking influencers to sign simple contracts that specify what’s agreed to be provided, what they promise to do in return and over what period. The company’s attorney can draw up a basic influencer agreement for the business to use with social media influencers going forward.
Corporate impersonation
Most business owners are familiar with the dangers of phishing schemes and have warned employees not to click links contained in suspicious emails. But savvy scammers have started using companies’ names, logos and other intellectual property, making phishing emails hard to identify. For instance, a perpetrator might set up a website that resembles the company’s site and use it to infect visitors with malware.
Thwarting these schemes can be especially challenging. If a business owner suspects that a con artist is impersonating the company, it should notify customers, vendors and other stakeholders immediately via email and social media channels. It’s important to warn of fake messages and remind them that the business doesn’t request sensitive information (such as credit card numbers) by email. An attorney can help draft these communications, so as not to alarm stakeholders, and help report the incident to the Internet Crime Complaint Center (ic3.gov).
Compromised business emails
Fraudsters also may pose as supervisors or vendors and send compromised emails to workers to gain access to their employers’ systems and data. Business email compromise fraud has become more prevalent since the COVID-19 pandemic as more employees work remotely. Perpetrators typically ask recipients of compromised emails to initiate financial transactions, such as transferring money to an external account, and usually stress urgency. If employees can’t quickly verify the request with the real person (as they might be able to do if they shared office space), they sometimes go ahead and transfer money to the crook.
It’s important to educate employees about business compromise email scams. Employers should stress that workers should never assume a financial transaction request is legitimate. They should first speak face-to-face with the sender in person or on a phone call or video chat initiated by the employee.
Threats abound
Businesses are under frequent threat from fraud, and new schemes can emerge from places you might never have imagined. A forensic accountant can help employers identify vulnerabilities and establish policies and procedures that will help reduce fraud risks.
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