Irish SMEs lost €19m in email scams in the past two years
Irish businesses lost €18.9m over the past two years through email-related scams, with firms losing an average of €22,000 in each incident.Invoice redirection and CEO impersonation scams remain the top fraud risks to businesses, according to new data from FraudSMART, the fraud awareness initiative led by Banking & Payments Federation Ireland (BPFI).They said more than two-thirds of SMEs have been targeted by a scam in the last 12 months, but more than half (53%) do not have specific fraud awareness guidelines and training programmes in place“The scale of email-related scams targeting Irish SMEs is deeply concerning," Niamh Davenport, Head of Financial Crime, BPFI said."The majority of cases we are seeing are invoice-redirection scams, which often start with, what appears to be, a legitimate email from a supplier known to the business, but which has been hacked or closely copied by fraudsters. They usually don’t request any payment upfront but claim to have moved to a new bank account and ask for their payment details to be updated on the system for future invoices. When a legitimate invoice is issued by the supplier at a later date, the business ends up paying it into the ‘new account’ controlled by the fraudster. CEO impersonation scams, while not as prevalent, can be even more deceptive, where fraudsters impersonate a company’s senior executive in order to convince an employee to disclose sensitive information or make an unauthorised financial transaction.”According to a survey the BPFI conducted with ISME, 67% of SMEs say they’ve been targeted by a financial scam in the last 12 months, while 78% have received an unexpected or urgent request that raised suspicion. Most attempted scams are coming through email (88.4%) as well as phone calls (51.2%) and text messages (48.8%). Increasingly, fraudsters combine these channels - for example, following up an email with a phone call or text message - to create a greater sense of urgency and legitimacy.Neil McDonnell, CEO of ISME said the findings are a stark reminder that fraud is now a day‑to‑day business risk for SMEs. "More than three-quarters (77%) of ISME members who took part in the survey, believe that financial fraud is a moderate or serious threat to their business," he said."Falling victim to scams is not only financially damaging but can fundamentally undermine trust within a business. Employees in particular, are often the ones targeted by fraudsters and therefore need to be supported to play a key role in fraud prevention. The good news is that prevention doesn’t have to be complicated. Putting in place simple controls such as verifying any change to supplier bank details, introducing dual approval for higher‑value payments, and making sure every member of staff knows the warning signs can make a real difference. I would encourage all SMEs to put regular fraud training in place for their workforce.” The latest findings come as FraudSMART launches a new SME fraud awareness campaign, being run in partnership with ISME and business owner and TV presenter, Brendan Courtney. Susan Russell, President, BPFI and Chief Executive of the Retail Ireland division of Bank of Ireland Group said fraud is an evolving threat for businesses of every size, and it increasingly relies on deception as much as technology, creating urgency to try to bypass routine processes.
