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Half a million businesses impacted by “FAKE BOSS” scams: legal sector most at risk

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Half a million businesses impacted by "FAKE BOSS" scams: legal sector most at risk
  • Impersonation fraud is on the rise, with small and medium businesses losing an average of £27,000 to fraudsters[i]
  • Six per cent of victims have had to make employees redundant due to the financial impact
  • The average loss of £27,000 is nearly equivalent to the average salary in the UK[ii]
  • Law firms most susceptible to falling victim (19 per cent), followed by HR professionals (17 per cent), IT workers (17 per cent) and finance companies (16 per cent)
  • These scams occur when a fraudster uses the information and personal data of suppliers, bosses or business contacts and impersonates them, in an attempt to defraud a company out of money
  • Get Safe Online and Lloyds Bank have published a video showing a team of CEO impersonators dubbed the ‘fraudstars’ to demonstrate the ways in which scammers can dupe companies into making payments, based on real-life scams

With one in twelve (eight per cent) of respondents having fallen victim to impersonation fraud, it is likely that nearly half a million (454,960[iii]) SME businesses in the UK have been impacted by these scams.

According to data from Lloyds Bank there has been a 58 per cent rise in this type of crime in the year to date[iv], however as this is only reported fraud, the true scale of the problem is likely to be much larger.

Sectors at risk from impersonation fraud at work

  • Legal (18.8 per cent)
  • Human resources (17.2 per cent)
  • IT and Telecoms (17 per cent)
  • Finance (15.9 per cent)
  • Arts and Culture (15 per cent)
  • Healthcare (8.5 per cent)
  • Manufacturing and Utilities (8 per cent)
  • Architecture, Engineering & Building (7.8 per cent)
  • Travel & Transport (7.6 per cent)
  • Education (6.2 per cent)
  • Retail, Catering & Leisure (5.5 per cent)
  • Other (4.2 per cent)

To raise awareness and educate workers on how to stop scammers, the bank has teamed up with Get Safe Online, the UK’s leading source of online safety information.

This comes as only 20 per cent of victims say they now think twice when receiving a request at work – and the research reveals that a lack of precautions around online safety could be assisting impersonation fraudsters. Over a third (37 per cent) of employees don’t know what to look out for or don’t have any security precautions in place – leaving them vulnerable.

Gareth Oakley, Managing Director of Business Banking at Lloyds Bank comments:

‘The rise of impersonation fraud is a very concerning issue for small and medium-sized businesses. We know that falling victim to these types of scams can be serious as the impact extends beyond just the financial implications. This is why we’ve teamed up with Get Safe Online – to help educate business owners and employees on how to recognise these scams and take the right precautions to protect themselves’.

Impact on employee wellbeing

The fallout from fraud is not just financial. Respondents revealed that the attacks caused emotional upset too. Fifteen per cent felt angry that they were targeted, with one in twelve (8 per cent) saying they couldn’t trust people close to them.

The research also found that one in 20 (five per cent) victims of impersonation fraud were so ashamed that they hid their mistake from their team, potentially with the fear of being fired on their mind. However, hiding a mistake like this may only cause further problems: if the systems have been compromised, then fraudsters may be able to get access to other critical information, or make additional payment requests meaning that losses will increase.

Victims of impersonation fraud often face financial consequences: seven per cent of companies affected said they had experienced financial hardship, with over one in twenty (six per cent) having to make employees redundant due to the financial impact of the scams.

Over half (53 per cent) of respondents say they have experienced scammers posing as their boss, demonstrating a rise in popularity of CEO impersonation fraud. A similar number (52 per cent) say they have suffered fraudsters posing as suppliers, with invoice fraud – where a false change in bank account details is sent from a legitimate-looking supplier – another common scam.

Business email compromise, where scammers intercept a legitimate email trail and change the beneficiary bank account details, is an increasingly common method of impersonation fraud, according to Lloyds Bank. This is especially dangerous as fraudsters can change information in a genuine email thread, therefore there are no other warning signs. As email is not a secure method of communication, so any change of details or financial information should always be double checked with a trusted contact.

Legal sector most at risk

Of those affected by the crime, individuals working in legal roles are the most likely to fall victim and be caught out (19 per cent) due to the high quantity of financial transactions they are involved in, followed by HR professionals (17 per cent), IT workers (17 per cent) and finance companies (16 per cent). However, finance workers are the scammers’ primary targets, with nearly one in five (19 per cent) of respondents saying they, or someone else in the finance team had been targeted by the scammers.

To raise awareness and educate workers on how to stop scammers, Lloyds Bank has teamed up with Get Safe Online, the UK’s leading source of online safety information. They have created a video where a team of CEO lookalikes pretend to be the real deal to scam unsuspecting staff out of money. These fraudsters attempt both CEO fraud and invoice fraud. In doing so they demonstrate some of the most common techniques used in impersonation fraud, including:

  • Changing bank account details – where scammers pose as suppliers or other contacts and notify victims that their bank details have changed and get businesses to make payments to the fraudsters bank account (commonly known as invoice fraud)
  • Phishing – sending emails, texts or voicemails purporting to be from a reputable company to get individuals to reveal personal information
  • Fake emails pretending to be your boss or other senior colleagues – emails set up to look very similar to legitimate emails, which are sent to try and trick the recipient into paying funds to a fraudulent account
  • Social engineering – the act of manipulating or tricking people into certain actions including divulging personal information or financial information

Speaking on how businesses and employees can avoid falling victim to impersonation fraud, Tony Neate, CEO of Get Safe Online, comments:

‘The most effective way to ward against these fraudsters is to double check the details. Verify any requests for amended payments to an organisation directly using established contact details. If you’ve received a suspicious email, always check with the person you believe sent it by asking in person, phoning them or using a different trusted communication method’.

The poll of 1,500 SME workers further reveals that tech savvy millennials face the highest risk of being targeted – with more than 1 in 10 (12 per cent) falling victim or knowing someone who has fallen victim to impersonation fraud.

To find out more, please head to www.getsafeonline.com

[i]Data from Lloyds Bank: average loss to a commercial customer for impersonation fraud is £27,000. This is the average loss per CEO and Invoice Fraud case during the time period 1st January 2016 and 30th June 2018

[ii]https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/allemployeesashetable1 Average salary is taken from Total Table 1.1a Weekly Pay – Gross, Tab: all, Mean weekly pay multiplied by 52 for the average annual pay.

[iii]Assuming eight per cent of SMEs (from omnibus research) have been victims and there are 5,687,000 SMEs in the UK. Statistic taken from: page 5, House of Commons Library, Briefing Paper, Number 06152, 28th December 2017, Business Statistics

[iv]Data from Lloyds Bank: number of impersonation fraud (Invoice and CEO Fraud) attacks since 2017 (pro-rata)

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Oil prices steady as lockdowns curb U.S. stimulus optimism

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Oil prices steady as lockdowns curb U.S. stimulus optimism 1

By Noah Browning

LONDON (Reuters) – Oil prices were steady on Monday as support from U.S. stimulus plans and jitters about supplies competed with worries about demand due to renewed lockdowns to prevent the coronavirus from spreading.

Brent crude futures for March rose 7 cents, or 0.1%, to $55.48 a barrel by 1210 GMT. U.S. West Texas Intermediate crude for March was up 5 cents, or 0.1%, at $52.32.

“Sentiment was buoyed by expectations for a blockbuster coronavirus relief package … (but) the tug of war between stimulus optimism and virus woes is set to continue,” said Stephen Brennock of broker PVM.

U.S. lawmakers are set to lock horns over the size of a $1.9 trillion pandemic relief package proposed by new President Joe Biden, financial stimulus that would support the economy and fuel demand.

European nations, major consumers, have imposed tough restrictions to halt the spread of the virus, while China reported a rise in new COVID-19 cases, casting a pall over demand prospects in the world’s largest energy consumer.

Barclays raised its 2021 oil price forecasts, but said rising cases in China could contribute to near-term pullbacks.

“Even though the pandemic is not yet slowing down, oil prices have good reasons to start the week with gains,” said Bjornar Tonhaugen from Rystad Energy.

Supply concerns have offered some support. Indonesia said its coast guard seized an Iranian-flagged tanker over suspected illegal fuel transfers, raising the prospect of more tensions in the oil-exporting Gulf.

“A development that always benefits prices is the market turbulence that conflicts create,” Tonhaugen added.

Libyan oil guards halted exports from several main ports in a pay dispute on Monday.

Output from Kazakhstan’s giant Tengiz field was disrupted by a power outage on Jan. 17.

(Editing by David Goodman and Edmund Blair)

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Dollar steadies; euro hurt by vaccine delays and German business morale slump

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Dollar steadies; euro hurt by vaccine delays and German business morale slump 2

By Elizabeth Howcroft

LONDON (Reuters) – The dollar steadied, the euro slipped and riskier currencies remained strong on Monday, as currency markets were torn between optimism about U.S. stimulus plans, and the reality of slow vaccine rollout and the economic impact of lockdowns in Europe.

Market sentiment had turned more cautious at the end of last week as European economic data showed that lockdown restrictions to limit the spread of the virus hurt business activity, dragging stocks lower.

The safe-haven dollar declined gradually overnight, and riskier currencies strengthened. It then recovered some losses after European markets opened, and was at 90.224 against a basket of currencies at 1152 GMT, flat on the day.

On one hand, market sentiment is supported by hopes for President Joe Biden’s $1.9 trillion fiscal stimulus plans, as well as the expectation that central banks will continue to provide liquidity.

But, in Europe, the extent of the risk appetite was limited by a lack of progress in rolling out the COVID-19 vaccine as well the economic impact of lockdown measures.

German business morale slumped to a six-month low in January, surprising market participants who had expected the survey to show a rise.

“It’s very much a case of hopes for the future against the reality of the first quarter of this year which is going to still prove to be fairly troubled,” said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

“For now at least, the optimism that we’re hoping for has been somewhat delayed and that has taken a little bit of steam out of the euro and just put a little bit of support back in the dollar but ultimately I think it is still a case of those high-beta commodity currencies, reflation currencies, will continue to perform well,” he said.

Analysts expect a broad dollar decline during 2021. The net speculative short position on the dollar grew to its largest in ten years in the week to Jan. 19, according to weekly futures data from CFTC released on Friday.

The U.S. Federal Reserve meets on Wednesday and Fed Chair Jerome Powell is expected to signal that he has no plans to wind back the Fed’s massive stimulus any time soon – news which could push the dollar down further.

“The process of tapering QE is likely to be a gradual process which could last throughout 2022, and then potentially be followed by the first rate hikes later in 2023,” wrote MUFG currency analyst Lee Hardman.

“In these circumstances, we continue to believe that it is premature to expect the US dollar to rebound now in anticipation of policy tightening ahead, and still see scope for further weakness this year,” he said.

The euro was down around 0.1% against the dollar, at $1.2153 at 1207 GMT. At the European Central Bank meeting last week, President Christine Lagarde said the bank was closely watching the euro. The euro surged 9% last year versus the dollar and reached new two and a half year highs earlier in January.

But despite this verbal intervention, traders remain bullish on the euro, expecting the bar for a rate cut to be high.

Elsewhere, the Australian dollar, which is seen as a liquid proxy for risk, was up 0.2% at 0.7726 versus the U.S. dollar at 1208 GMT.

The New Zealand dollar was up 0.5%, while the commodity-driven Norwegian crown was up 0.2% the euro.

The safe-haven Japanese yen was flat on the day at 103.815 versus the U.S. dollar.

Graphic: USD, https://fingfx.thomsonreuters.com/gfx/mkt/qmypmyjdxpr/USD.png

(Reporting by Elizabeth Howcroft, editing by Ed Osmond and Chizu Nomiyama)

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Hong Kong’s Cathay Pacific warns of capacity cuts, higher cash burn

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Hong Kong's Cathay Pacific warns of capacity cuts, higher cash burn 3

(Reuters) – Cathay Pacific Airways Ltd on Monday warned passenger capacity could be cut by about 60% and monthly cash burn may rise if Hong Kong installs new measures that require flight crew to quarantine for two weeks.

Hong Kong’s flagship carrier said the expected move will increase cash burn by about HK$300 million ($38.70 million) to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels.

Hong Kong is set to require flight crew entering the Asian financial hub for more than two hours to quarantine in a hotel for two weeks, the South China Morning Post reported last week, citing sources.

“The new measure will have a significant impact on our ability to service our passenger and cargo markets,” Cathay said in a statement, adding that expected curbs will also reduce its cargo capacity by 25%.

The airline, in an internal memo seen by Reuters, requested for volunteers among its crew who could fly for three weeks, followed by two weeks of quarantine and 14 days free of duty, adding it will be a temporary measure and not all its flight will require such an operation.

“We continue to engage with key stakeholders in the Hong Kong Government,” the memo said.

In an emailed response to Reuters, a Hong Kong government spokesperson said: “In the light of the evolving pandemic situation locally and internationally, the Government will keep reviewing and refining the arrangements applicable to different categories of exempted persons, including air crew, with reference to all relevant considerations.”

Separately, a company spokeswoman said the airline could not detail the impact on vaccine transport specifically in terms of cargo shipments.

The aviation industry has been hit hard by the COVID-19 pandemic as many countries imposed travel restrictions to contain its spread.

In December, Cathay’s passenger numbers fell by 98.7% compared to a year earlier, though cargo carriage was down by a smaller 32.3%.

(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Jamie Freed in Sydney and Twinnie Siu in Hong Kong; Editing by Bernard Orr, Arun Koyyur and Mark Potter)

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