Insurers must be ready to meet the challenge.
Wire fraud schemes that rely on the use of targeted phishing emails to divert funds to criminals are on the rise, and they are increasingly sophisticated (and easy to fall for). The most common methods we are seeing involve bad actors either using social media or other public information to produce credible emails sent to trick a company into paying (fraudulent) invoices, or they hack into a business and create false invoices that then are sent by the bad actor to clients or customers of the business.
Wire transfer fraud is estimated to be the fastest growing cybercrime in the U.S. The Internet Crime Complaint Center (IC3), a partnership with the FBI and the National White Collar Crime Center (NW3C), reported a 480% increase in 2017 from 2016. The IC3 reports that between 2013 and 2018 U.S. victims of business email comprises collectively lost at least $2.9 billion, with global losses estimated at four times this amount.
Changing and implementing best practices for wire transfer processes is critical, including training employees regarding how to verbally confirm wires and how to handle requests for change of bank details. Some insurance products can address wire transfer fraud losses, but many do not provide coverage for the wired amounts, so businesses need to understand the coverage and risks presented by the fraudulent wire transfer trend.
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