Specialist cyber insurer
Beazley has revealed that organisations are facing an increased threat to their operations from what it calls fraudulent instruction scams, in which cyber criminals trick victims into transferring funds to bogus accounts.
Claims data recorded by the insurer shows that fraudulent instruction incidents quadrupled in 2017, with policyholders incurring losses ranging from a few thousand dollars up to $3 million (around £2.1 million).
With claim amounts in 2017 averaging $352,000 (around £247,000), Beazley described the scam as having “rapidly become a significant financial threat to many organisations.”
Fraudulent instruction scams see criminals use hacking and phishing techniques to accumulate information that allows them to send plausible-looking requests to transfer funds to bogus accounts, the insurer said today. In addition to losing money, organisations may also have to conduct exhaustive systems analysis to ensure that individuals’ personal and private data has not been compromised.
“Cyber-criminals are finding new ways of getting organisations to part with their hard-earned cash,” Katherine Keefe, global head of Beazley Breach Response Services, commented.
“In 2017 we saw fraudulent instruction emerge as a new trend which offers significant reward for the perpetrators in return for little effort, but brings potentially devastating financial consequences for the victim.”
The top three industry sectors affected last year were professional services, financial services and retail, which experienced 22%, 21% and 12% respectively of the total incidents reported to Beazley.
However, the insurer warned that incidents are growing across all sectors, and in particular where single, large transactions, such as real-estate purchases, are involved.
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