Case Studies

Saving a leading engineering firm over $1m

How a large construction and engineering firm used eftsure’s solution to prevent a payment of over $1m to a fraudster as the consequences of a supplier’s business email having been compromised by a scammer.

13/09/2021

Overview

In the era of digital transformation, our reliance on technology has become unavoidable. As with most changes, the impact is multifaceted. Whist technology significantly increases productivity, saves time and enhances the flow of information, it can also expose businesses to new areas of vulnerability. Both newly acquired and existing data held by organisations is one such area that can become susceptible to attacks.

Cybercriminals know exactly how sensitive online banking data is in the 21st century. They are also persistent, resilient and patient. It’s best to assume your business is constantly under a cyber-attack. Just think about all the phishing emails your spam filters caught. Eventually one will slip through the cracks. Eventually, an employee will click on something they shouldn’t. Or your suppliers’ employee will. It only takes a single employee of any one of your suppliers to be fooled by a scammers email resulting in the supplier’s email being compromised and potentially leading to your company being defrauded.

BEC scams are continuing to explode in popularity among cybercriminals, and their goal is almost always financial gain.

Challenge

One of eftsure’s customers is a large engineering and construction firm that undertake large construction projects, scheduled maintenance and ongoing building service works. Their areas of expertise include project management, engineering, off-site prefabrication and integration.

Due to their diverse portfolio of services and products, the volume of invoices they pay every month is a substantial amount. As a result they recognised the risk they were exposed to and the importance of following best practice by putting in place both strong controls and eftsure’s payment protection tools to help prevent fraud and error.

They signed up with eftsure in the middle of 2019 and quickly became a sophisticated user of eftsure – utilising all aspects of the solution and in particular, the supplier onboarding functionality of the eftsure portal to its utmost. They have 19 entities set up under the one customer and their Supplier Onboarding form contains numerous pages of questions they require their suppliers to complete.

Despite the sound controls and effective payment protection software and processes they have in place, there is always a chance that their own or one of the suppliers’ emails will be compromised.

The following is a recent case study of how one of their supplier’s email was compromised and how using eftsure saved them from making a fraudulent payment.

Approach

At the beginning of February 2020 they had been advised of a change of account details for one of their suppliers – which is a professional company involved in providing services to the construction industry.

The requested change of banking details arrived in an email from the legitimate account of their primary contact at the supplier. It was part of a legitimate email trail the supplier and the customer had been corresponding on to discuss a particular engagement.

In keeping with the eftsure process the customer initiated a change request from the eftsure portal requesting the supplier provide their updated details via eftsure so that eftsure can independently verify them.

Since the supplier’s email was under the control of the fraudster, the fraudster intercepted the email and completed the onboarding. This triggered initial internal eftsure alerts inside the verification system because the IP address of the fraudster didn’t match the IP address region of the supplier and these new details differed from other banking details recently paid into for the same supplier by other customers of eftsure (A number of other internal warning flags were also triggered by the eftsure sophisticated algorithms).

Furthermore, the “supplier” had avoided use of the eftsure Banklink verification process as the fraudsters knew that would immediately show the details as fraudulent.

As per eftsure’s process, eftsure independently sourced the phone number of the supplier and called the supplier to verify the details. In that call eftsure were advised that the new details provided were incorrect and unknown to the supplier. eftsure immediately failed the onboarding and provided a new invitation to the supplier using a different legitimate supplier email address and advised the customer and supplier of the attempted fraud. The legitimate supplier then logged in and provided the correct details. The details were then reverified by eftsure by cross-matching them to other customers paying the supplier and through another independent phone call.

After notification by eftsure, the supplier performed further investigations and found that their email account had been compromised. Fraudsters had been monitoring communication in that compromised email account and using it to attempt to defraud the supplier’s customers. Once this fraud was exposed, the supplier closed the email account completely and contacted all their other customers to warn them not to accept any changed details.

The fraudulent details were added to eftsure’s list of fraudulent accounts so if any other eftsure customer were to make a payment to this account, they would seeared thumb with status ‘Fraudulentaccount’.

Results

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