Compliance & Regulation | Articles
What to do if your business is a victim of fraud
5 key steps to reporting a crime & potentially recovering lost funds
What should you do if you realize your business has become a victim?
As the closures stretch on due to the unprecedented COVID-19 pandemic, businesses continue to operate, many with significant modifications. For companies that previously functioned with mostly in-person interactions, payments and other dealings had to quickly shift online. Even for those who already managed money transfers digitally or customer communications via email, there most likely has been some level of adjustment. Unfortunately, the shift has led to a rise in business fraud. Clients of Western Union Business Solutions can engage our compliance team for assistance in reporting these suspected crimes and attempting to recover stolen funds.
What threats should businesses look out for?
One crime, known as business email compromise, involves a company receiving an email and pretending to be a known client or vendor. The message may indicate that the payment details have changed, and funds now need to be transferred to a new account, bank or recipient. Because the note includes familiar details, such as the logo or name, the reader may deem it legitimate and follow the instructions. In the wake of this payment, a business may likely recognize their error and find themselves in an alarming situation – their money is gone.
Realizing your business has become a victim and funds have been sent to a fraudster can be distressing. In fact, the true number of instances is unknown as not all crimes of this nature are reported. Yet, it's important to notify the right parties so action can be taken.
Here are five steps to consider taking if you determine that funds have been sent to a fraudster. Note that the recovery service is only available to clients of Western Union Business Solutions:
Immediately contact accounting at your business, as well as your Western Union Business Solutions representative, to make a report.
Keep records of ALL contact made with the fraudster (e.g. electronic copies of the emails)
Report the incident to your local law enforcement.
If there's an indication that the email account has been compromised, contact your IT department for a detailed review.
Do not make any further payments to the beneficiary until the security issue is resolved.
Is there a way to recover the money?
Yes, this is possible. Recently, Western Union Business Solutions recovered $4.4 million USD for a client whose customer had lost money from an email scam. It's important to contact your representative as soon as you can, with all relevant information and documentation. However, recovery is not guaranteed, and it is better to work towards prevention.
If you notice the following details in an email communication requesting a change in payment methods or amounts, be cautious and explore further before actioning. Here are some key red flags to watch out for:
Changing the country of the beneficiary's bank
Changing the beneficiary name
A reason is provided for the change
A lookalike or spoofed email address
Incorrect spelling or grammar
Invoice change (logo, style or file size)
Urgency – the sender asks for the funds ASAP
3 key steps to prevention
Keep a list of your contacts with emails, phone numbers and addresses for reference
Never take a significant financial action from an email instruction alone
Always call your contact to verbally confirm any change
Western Union Business Solutions is a business unit of The Western Union Company. Services in Hong Kong are provided by Western Union Business Solutions (Hong Kong) Limited, company number 1474270 ("WUBS")
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