Entrepreneurs, did you know that the movement of funds through wire transfers is susceptible to theft?
How the robbery takes place – It starts when a company receives an email from a supplier requesting funds to be transferred to another bank. This request appears to be unusual, which prompts the company to request a confirmation by return email. A confirmation is received from the same source confirming that the original request is proper and accurate. Based on the confirmation received, funds are transferred to the new bank.
Emails intercepted – What the company doesn’t realize is the fact that all the emails were intercepted and compromised.
Outcome – The Company is defrauded of the amount of the funds that were transferred.
Prevention – A telephone call to the supplier’s contact person, president, and or director would help in detecting fraud of this nature. Also, companies should consider reviewing their insurance policies to ensure that they have adequate insurance coverage to remedy an incident of theft or fraud.
Vazken Izakel, Partner