FBI Warns of Wire Transfer Scam Targeting U.S. Small Businesses

by Kevin Casey on April 28, 2011
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The Federal Bureau of Investigation issued a fraud alert this week warning smaller businesses to be on guard against a new wave of wire transfer scams. The alert follows a string of unauthorized wire transfers that have robbed U.S.-based businesses of $11 million to date.

“Between March 2010 and April 2011, the FBI identified 20 incidents in which the online banking credentials of small-to-medium-sized U.S. businesses were compromised and used to initiate wire transfers to Chinese economic and trade companies,” the alert says. (Read the complete alert.) All of the fraudulent transfer recipients were located near the Russian border. The FBI and partner agencies are urging banks and other financial institutions to notify their business customers of any wire transfers heading for the Heilongjiang province of China.

Small businesses should also be extra vigilant about monitoring their bank accounts for suspicious activity. “Like most account takeover fraud, the victims tend to be small-to-medium-sized businesses and public institutions that have accounts at local community banks and credit unions, some of which use third-party service providers for online banking services,” the report says.

The recent scams used malware distributed via malicious websites and phishing emails to steal banking credentials and initiate fraudulent wire transfers. All of the transfers involved amounts between $50,000 to $985,000; most were for more than $900,000, but the alert notes that the thefts were more successful when the amount stolen was less than $500,000.

The alert serves as a good reminder for small businesses to evaluate and audit their online security practices. Take steps to protect your computers and your important data from online criminals. Use common sense when you’re online — don’t open suspicious emails or click on untrusted links.

Likewise, keep close tabs on your business’ bank accounts — monthly reconciliation might be fine for bookkeeping purposes, but not for optimal security. Failing to regularly inspect your accounts can put you at greater risk of check scams, unauthorized wire transfers, and other banking fraud. If any transactions look suspicious, call your bank immediately. In the event that you think your business is a victim of online fraud, you can also contact the Internet Crime Complaint Center.

Kevin Casey is a business writer for Intuit and is passionate about solving small business problems.

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