What is CEO Fraud and How to Protect Your Company

CEO Fraud: How to Safeguard Your Business

As cybercriminals become increasingly sophisticated, CEO fraud is one of the most dangerous tactics targeting businesses today. This scam manipulates employees into transferring funds or revealing sensitive information. Understanding CEO fraud and implementing preventative measures is crucial to safeguarding your organisation.

What is CEO Fraud?

CEO fraud, also called business email compromise (BEC), is a scam where attackers impersonate a company executive, usually the CEO, to deceive employees. Fraudulent messages often request urgent wire transfers, sensitive data, or confidential company information.

The Scale of the Problem: CEO Fraud in Numbers

• Nearly 75% of organisations report being targeted by CEO fraud at least once, according to the Verizon Data Breach Report.
• The average CEO fraud attack leads to losses of $140,000, according to the Association of Certified Fraud Examiners (ACFE).

These numbers demonstrate that no organisation is immune to this threat.

Common Attack Methods

CEO fraud often exploits human behaviour, including trust and urgency. Common attack techniques include:

• Phishing: Generalised emails designed to trick employees into sharing sensitive data, such as login credentials or financial information. Learn more.
• Spear Phishing: Targeted emails sent to specific employees using personal information to increase trust and likelihood of success. Learn more.
• Executive Whaling: Targeting high-level executives to access sensitive systems or financial assets. Learn more.
• Social Engineering: Manipulating employees into revealing confidential information without verification. Learn more.

How CEO Fraud Works: Attack Scenarios

• Fake Invoice Scam: Spoofed vendor emails request payment for fraudulent invoices.
• Urgent Wire Transfer Request: A “CEO” demands an immediate financial transfer to create pressure.
• HR Data Request: Emails impersonating the CEO request sensitive employee information like payroll or tax records.
• Compromising Vendors: Criminals target trusted third-party vendors to gain access to company systems or finances.

Main Targets of CEO Fraud

• Finance Teams: Employees handling wire transfers and invoices.
• HR Managers: Staff managing payroll or sensitive employee data.
• C-suite Executives: Top leaders targeted for direct access to financial and operational systems.
• Vendors and Partners: External stakeholders used to access company funds or data.

Prevention Steps: Protect Your Business from CEO Fraud

• Employee Training: Regularly educate staff on recognising phishing emails and verifying unusual requests.
• Policy Implementation: Establish clear procedures for handling wire transfers, including multi-level approvals.
• Technology Solutions: Use email filters, multi-factor authentication (MFA), and secure communication tools.
• Verification Practices: Always confirm requests for sensitive information or financial transfers via phone or in-person.

For more detailed guidance, see how to build a security awareness programme for the C-suite.

Take Action Now: Book a Free Demo for Cyber Security Awareness Training

CEO fraud is a rising threat, but with proper training, policies, and tools, your organisation can reduce risk. MetaCompliance offers customisable security awareness training for every department, including finance, HR, and the C-suite. Book a free demo or explore MetaCompliance’s solutions to safeguard your business.

• Human Risk Management Platform
• Automated Security Awareness
• Advanced Phishing Simulations
• Risk Intelligence & Analytics
• Compliance Management