Email scams and cyber crimes have become increasingly concerning for businesses as of late. In fact, according to the Internal Revenue Service (IRS), phishing emails are on the rise, opening the door for hackers to infiltrate networks and obtain sensitive data from individuals, companies and government agencies.
Most of these new phishing emails have to do with payroll direct deposit, wire transfer, and W-2 scams, which puts financial institutions in the crosshairs. The emails shed light on the need for certain types of bank crime insurance and cyber liability to financially back up a bank in the wake of a hacking scandal, and also remind us why it’s important to stay alert during the tax season.
How They Work
Given the tax and financial elements of these new emails, the IRS is already reporting that tax preparers are among those affected. The emails usually impersonate a real company employee, such as an executive or someone in IT. The emails are sent to payroll or human resources and asks employees in those departments to change the employee’s deposit for payroll purposes. A new bank account is provided as well as a routing number, which delivers future deposits to a bogus account that a hacker oversees.
These emails can also come across as if they were being sent from an executive requesting wire transfer information. An email outlines a request that a wire transfer be made to a bank account for company purposes, but is in reality controlled by the scammer.
And in another version, an email impersonates a company executive and requests information about forms W-2 from HR. In the email, a scammer asks for the W-2 and earnings summary of all W-2 employees, or request Social Security Numbers of a list of employees and other sensitive information, like salary and home address. What happens next is the scammers take the information to file fraudulent tax returns for refunds.
What to Do
For banks, having bank crime insurance in place will help to safeguard your finances and information as well as those of your clientele. But if an email like these come across your network, you should forward non-tax related email scams to the Internal Crime Complaint Center, which is overseen by the Federal Bureau of Investigation (FBI).
Also, the IRS can handle tax-related phishing emails. If you receive a tax-related phishing email, forward it over to phishing@irs.gov. This reporting process enables the IRS and its partners to identify trends and issue warnings based off data that is compiled.
Scammers in general should not be interacted with. If there is any kind of bogus or suspicious email that comes across your system, do not proceed. The IRS and its Security Summit partners, which include state revenue departments and tax community partners, are concerned that these finance scams could be more apparent in 2019, especially earlier in the year for tax season.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (877) 485-4413 to speak with one of our professionals.