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The Dirty Dozen: The 12 Most Costly Phishing Attack Examples – Hashed Out by The SSL Store™

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The list of the top phishing attacks and BEC scams
and what made them so successful

Phishing is one of the most vicious and dangerous threats to
your businesses — regardless of whether you’re a large corporation, a small
business, or something in-between. The most successful phishing attack examples often involve a combination of different
social engineering tactics and can involve the impersonation of CEOS or company
executives, government organizations, charities, vendors, and business partners.

At some level, everyone is susceptible to phishing scams because they prey on an individual’s
personal judgment, insecurities, or (in some cases) incompetence. Whether
you’re a c-level executive, a celebrity, or an employee at a small business, these
attacks are designed to use a variety of deceptive tactics to try to influence,
manipulate, or outright trick you into performing a particular task. The goal
could be to gain access to vital systems or to get you to make large wire transfers
to fraudulent accounts.

Falling for business email
compromise schemes that involve phishing and email spoofing are among
the most costly mistakes companies around the globe make. How costly? We were
wondering the same. That’s why we’ve taken the time to identify the top 12 phishing attack examples.

How did these scams occur? More importantly, what can we
learn from each of these notable phishing attack
examples?

Let’s hash it out.

The 12 Most Costly Phishing Attack Examples
to Date (Ranked from Highest to Lowest Cost)

  1. $100
    million
    — Facebook and Google
  2. $75
    million
    — Crelan Bank
  3. $61
    million
    — FACC
  4. $50
    million
    — Upsher-Smith Laboratories
  5. $47
    million
    — Ubiquiti Networks
  6. $44
    million
    — Leoni AG
  7. $31
    million
    — Xoom Corporation
  8. $21
    million
    — Pathé
  9. $18
    million
    — Tecnimont SpA
  10. $17
    million
    — The Scoular Company
  11. $11.8
    million
    — MacEwan University
  12. $3
    million
    — Mattel

Breaking Down the Top 12 Most Costly Phishing
Attack Examples

1. Facebook and Google

Facebook and Google, together, were scammed out
of more than $100 million
between 2013 and 2015 through an elaborate fake
invoice scam. Yeah, that’s an insane amount of money to lose due to what ultimately
boils down to an avoidable mistake. A Lithuanian hacker was able to accomplish
this feat by sending each company a series of fake invoices while impersonating
a large Asian-based manufacturer they used as a vendor.

2. Crelan Bank

Crelan Bank in
Belgium lost
$75.8 million
(approximately €70 million) in a CEO fraud attack that
was reportedly discovered during an internal audit. The identities of the
attackers are still unknown, but the bank has implemented new security measures
to prevent the attack from happening again.

3. FACC

FACC, an Austrian
aerospace parts maker, lost
$61 million
(approximately €54 million) in a CEO fraud scam. A
hacker posed
as the CEO and sent a phishing email to an entry-level accounting employee who
transferred funds to an account for a fake project. This kind of situation
underscores the importance of having comprehensive and regular cyber security
awareness training for employees. This case is a landmark in another way — the
company is suing their former CEO and CFO for not doing enough to protect the
company from millions in losses. In the ongoing case, the company has alleged
that the two leaders “failed to set up adequate
internal controls and to meet their obligations of collegial cooperation and
supervision.”

4. Upsher-Smith Laboratories

Upsher-Smith
Laboratories
, a U.S. drug company, was swindled
out of more than $50 million
over the course of three weeks in 2014. The
phishers, impersonating the company’s CEO, sent phishing emails to the
company’s accounts payable coordinator that instructed them to make nine
fraudulent wire transfers. Though they were able to recall one wire, which dropped
their loss to $39 million (plus interest), they still initially transferred
more than $50 million, which is why they rank fourth on our list.

5. Ubiquiti Networks

Ubiquiti Networks,
a U.S. computer networking company, faced an unusual situation: The company was
unaware that it had been taken
for $46.7 million
— nearly 10% of the company’s cash position — through CEO
fraud emails and was notified
of the activity by the FBI
, which had been watching the company’s Hong Kong
unit’s bank account.

According to the company’s quarterly
financial report
:

“The incident involved employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department. This fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties.”

6. Leoni AG

Leoni AG, a
leading manufacturer of wire and cables, was scammed out of €40
million (approximately $44 million) when a finance employee in the company’s
Romania office was targeted by a phishing email claiming to be from the
company’s senior German executives. This situation is another one of those phishing attack examples that demonstrates the
importance of training employees to identify phishing emails.

7. Xoom Corporation

Xoom Corporation,
a leading electronic funds transfer provider, found itself in the crosshairs of
a BEC scam that cost them nearly $31
million. In Q4
2014
, the company reported a “$30.8 million business e-mail compromise
(“BEC”) fraud loss” when communications
involving employee impersonation
and conveying fraudulent requests targeted
the company’s finance department.

8. Pathé

Pathé, a European cinema chain, was scammed out of more than $21 million (approximately €19 million) when two top-level executives were targeted in an email scam. Over nearly a month, the hacker got them to transfer multiple payments while impersonating the company’s CEO. The company ultimately ended up terminating the CEO over the incident.

9. Tecnimont SpA

Tecnimont SpA, an
Italian engineering, construction and procurement company, was defrauded
$18.6 million
through an elaborate BEC scheme. This phishing attack example involved cybercriminals sending emails to
the company’s India executives and the scheduling of fake conference calls to
discuss a confidential acquisition in China.

10. The Scoular Company

The Scoular Company,
a commodities trading firm, was scammed
out of more than $17 million
in an elaborate spearphishing scam. Phishers,
pretending to be the company’s CEO, sent emails to the company’s controller,
instructing them to wire funds while referencing the company’s real accounting
firm (though the contact information they provided was fake — the email address
was from a Russian server and the Skype phone number was registered using an IP
address in Israel).

11. MacEwan University

MacEwan University,
an educational institution in Canada, was bilked out of nearly $11.8 million in
2017 when phishers
imitated Edmonton construction companies
and sent out fake invoices as part of
a massive scam. The cybercriminals went as far as to create multiple websites
for more than 12 construction companies in the area to collect from the real
businesses’ business partners. The good news for MacEwan is that they were able
to recover 92% ($10.9 million) of their stolen funds in the end.

12. Mattel

Mattel, the
manufacturer that sells Barbie and other kids toys, was scammed
out of $3 million
through CEO fraud in 2015. However, luck was on Barbie’s
side in that the phishers performed their attack the day before a bank holiday.
This gave Mattel executives time to get international police and the FBI
involved and, ultimately, recover their stolen funds within days of the transfer.
Unlike some of the other companies on our list of phishing
attack examples, Mattel enjoyed a happy ending to what could have been a
very ugly cyber security story.

What Makes BEC Phishing Scams So
Successful

Business email compromise and phishing scams are on the
rise. The Internet Crime
Complaint Center (IC3)
reports “a 136% increase in identified global
exposed losses” relating to BEC/email account compromise scams between December
2016 and May 2018.

What makes phishing scams
so successful? They aren’t technology focused. Hackers are targeting people — they’re counting on employees
responding in a frenzy to urgent emails that appear to come from their
executives or vendors. “I need you to
transfer $X to X account as soon as possible to avoid an important deal falling
through!”

These attacks act on the idea that the employees they target
aren’t likely to question an email that comes from their boss’s boss (or boss’s
boss’s boss, and so on) or to double-check and verify information when they’re being
told to rush. It’s not about targeting vulnerabilities in networks or security
defenses; it’s about targeting you and your colleagues as people who make mistakes.

What We Can Learn from These Companies’ Phishing
Scam Experiences

There is a common trait among these 12 corporate phishing attack examples: Many of the employees
who received the messages simply complied with the fraudulent email requests
without first verifying that the requests were valid. In the cases where the
employees did try to verify whether
they should perform the task, most simply responded to the fraudulent email or
called the attacker(s) using the fake contact information provided in the
email.

Require Verification Through Other Official Channels

If the employees in any of these situations had reached out
through other official channels or methods — such as using known phone numbers
from their company’s phone directory to call the person directly, contacting
their assistant, or even just walk down the hall to speak with the alleged
requester face to face — they could have avoided losing millions of dollars in
fraud. Unfortunately, the true cost of phishing
attacks often does not end with the money that was stolen — other costs
include loss of revenue due to damage to the company’s image and reputation.

This concept goes hand-in-hand with our next recommendation,
which would make it mandatory to follow set processes before making any
financial transfers.

Implement New Processes to Increase Cyber Defenses

Another way these companies could have avoided falling prey
to phishing attacks is if they had account
verification and safeguard processes in place. This could entail requiring
employees to follow set processes (such as performing account verification,
requiring secondary and/or tertiary signatures by other personnel, and
requiring phone verification, etc.) before making any transfers over a set
amount — for example, $10,000. Sure, this may seem a bit inconvenient for your
accounting and finance department initially, but a little inconvenience sure
beats losing millions of dollars to cybercriminals.

Implement Employee Cyber Awareness Training

In addition to having the appropriate policies in place,
offering comprehensive cyber
security awareness training
for employees likely would have prevented many
of these phishing attack examples from
occurring. This form of education regularly trains employees to identify and
appropriately respond to phishing emails (which, in most cases, means not engaging
with the email itself, informing the IT administrator, and deleting or
quarantining the email). It also contributes to strengthening your
organization’s “human firewall.”

Cyber security awareness training can be offered face to
face or online, and periodic phishing testing should be performed to determine
the success of the training or to identify areas to focus on in future
trainings.

Use Email Signing Certificates

The final method of protection we’ll mention that could have
prevented any (or all) of these phishing attack
examples is the use of email signing certificates. Email
signing certificates
enable executives and other employees to digitally
“sign” their emails so their recipients can easily verify that they are who
they say they are. These certificates, which are issued by industry-trusted
certificate authorities (CA), use an S/MIME
protocol
(secure/multipurpose internet mail extension) to digitally sign
emails. By making the use of email signing certificates mandatory across the
board, it means that if someone in the finance or accounting department
receives an email that appears to come from the CEO, they can easily verify the
identity of the email sender.

An added bonus is that these certificates can also be used
to send secure emails using asymmetric encryption. This enables you to send an encrypted
email to a recipient who has the matching private key, which protects the
integrity of your data while it’s at rest and sitting in your recipient’s inbox
by ensuring that no one but the intended recipient can open it. Since many
email service providers use SSL/TLS to protect emails while they’re in transit,
this means that you’ll be able to enjoy both data in transit and data at rest
protection.   

Final Thoughts

There are new business email compromise and phishing attack examples taking place at companies
around the world. What this list shows is that no company is too big to fall
prey to tried-and-true phishing scams. While it’s important to secure your
devices and IT infrastructure to eliminate vulnerabilities, it’s just as
important to also strengthen your “human firewall” through training and
identity verification methods. 

If you know of any noteworthy attacks that should be included on our top phishing attack examples list in the future, be sure to mention them in the comments below.

Email Security Best Practices - 2019 Edition

Don’t Get Phished.

Email is the most commonly exploited attack vector, costing organizations millions annually. And for SMBs, the damage can prove fatal: 60% fold within 6 months of falling victim to a cyber attack. Don’t be one of them.

Article source: https://www.thesslstore.com/blog/the-dirty-dozen-the-12-most-costly-phishing-attack-examples/