Fraud Awareness: Social Engineering

Business email compromise (BEC) is one of the most costly and fastest-growing forms of financial crime affecting companies globally. Unlike traditional cyberattacks, BEC does not rely on malware or system breaches. It is a form of social engineering fraud that manipulates employees into authorizing fraudulent payments or disclosing sensitive information. For finance leaders, the risk is clear: one convincing email or SMS can trigger significant payment fraud within minutes.

However, it is possible to detect and prevent fraud. Regardless of how secure your business is, it is often the human element that falls prey to social engineering methods. While you cannot discount the human element, you can learn to anticipate how employees and colleagues might fall victim to social engineering tactics and develop measures to mitigate the risk.

What is Business Email Compromise?

Business email compromise occurs when a fraudster impersonates a trusted party— typically a senior executive, vendor, or finance colleague. The motive may, however, be the same: to request a wire transfer or a change in banking details to defraud the company.

Common examples include:

• A vendor requesting an update to banking information

• A ‘confidential’ payment request from the CEO

• An urgent transfer of funds tied to a supposed acquisition or legal matter

• An internal email directing Finance to process an immediate wire

BEC attacks are successful because they look legitimate and create urgency.

Types of Business Email Compromise and Social Engineering Fraud

Wire and email fraud remain highly successful because they are simple to execute and highly profitable. With minimal research and carefully crafted messaging, fraudsters can trigger significant payment fraud in minutes.

Most schemes fall under the broader category of BEC and social engineering fraud, where criminals manipulate finance teams into authorizing fraudulent transactions or sharing sensitive information.

Below are some common types of social engineering fraud.

Email Spoofing and CEO Fraud

In many business email compromise cases, attackers impersonate a trusted authority figure — often a senior executive. This is commonly known as CEO fraud. Fraudsters manipulate email addresses so they closely resemble legitimate domains. A single character change may go unnoticed. The request often appears urgent and confidential:

• An executive traveling overseas requesting an immediate wire

• A vendor asking to update beneficiary bank details

• A senior leader directing a time-sensitive payment tied to an acquisition

Because the message appears authentic, employees may assume security systems would flag anything suspicious. They often do not. By the time the fraud is discovered, funds may already have been transferred.

Caller ID Spoofing

Caller ID and Email Spoofing are relatively simple. Hackers make an email or caller ID appear to be legitimate, or seemingly match one that you oryour employees are used to seeing on a regular basis.

That email from your vendor asking you to update the bank account information appears completely legitimate, doesn’t it? What about that email from your company President asking you to send funds to him while travelling? If it were fraudulent, your firewalls and security features would catch it, right? You could be very wrong!

Unfortunately for many businesses, by the time a scam has been detected, it is far too late.

Warning Signs

• Calls requesting urgent payment changes or sensitive information

• Caller discourages verification or follow-up through official channels

• Slight inconsistencies in voice, tone, or context despite appearing familiar

Pretexting

Criminals create a false ‘pretext for contacting one of your employees. They may pretend they are a prospective supplier, research firm, bank or government agency asking for the names of employees, banking information, login credentials or something seeming equally innocuous.

Any information they gain can thereafter be used to build a profile which in turn allows the fraudster to pose as an employee and ultimately gain access to your business, personal or financial information, your systems or customers. They may move on to scam your business using Caller ID or Email Spoofing.

Warning Signs

• Requests for seemingly harmless information that builds over time

• Unsolicited outreach claiming to be from banks, regulators, or partners

• Vague or inconsistent explanations when questioned

Email Phishing Attacks

Phishing [pronounced Fishing] is a very common online scam. An email is sent with the intent to manipulate the recipient into disclosing personal, business or financial information. Typically, these phishing scams attempt to play on emotions or sympathies. They will stress an urgency and will contain a link often accompanied by a deadline for you to access and input your information. By disclosing any of these details you are essentially putting the fraudster a step closer to accessing your accounts.

Warning Signs

• Emails creating urgency with deadlines or consequences

• Links or attachments prompting login or data entry

• Slight variations in email domains or sender details

Remember – a legitimate urgent situation would never require anyone to send personal, business, or financial information by accessing a link.

Business email compromise and related social engineering fraud tactics succeed because they exploit process gaps - not system weaknesses. For finance teams, disciplined verification procedures are the strongest defense against escalating payment fraud risk.

Strengthening Fraud Prevention for Finance Teams

Preventing business email compromise requires structured controls. Leading organizations implement:

• Independent Verification Protocols Always verify payment or banking change requests using pre-existing contact information. Never rely solely on email instructions.

• Dual Authorization for Payment Changes Require two-person approval for new beneficiaries or banking updates.

• Segregation of Duties Separate payment initiation, approval, and release functions.

• Ongoing Training Provide regular training on business email compromise, CEO fraud, and emerging social engineering fraud tactics.

• Escalation Framework Empower employees to pause and escalate suspicious requests without penalty.

Why Business Email Compromise Remains a Priority Risk

Business email compromise continues to grow because it targets operational work flows, not system vulnerabilities. It is a finance and operational risk. Strong internal controls, disciplined verification procedures, and continuous awareness training are the most effective defenses against social engineering fraud. When it comes to payment instructions, process discipline must outweigh urgency.

How Do You Protect Your Business from Social Engineering Fraud?

We recommend taking steps similar to what Corpay does. Awareness and Training are key. Employ tactics that are designed to verify and validate the information your employee is receiving, before making any changes to payment details.

If you receive an email request to alter banking information, phone your contact at your vendor’s company to verify that banking information has been changed.

If you receive a phone call requesting a change to banking information, take the time to place a phone call to the number you have always used for your contact – not the phone number that just appeared on your caller ID when the request to change banking information was received – and verify the request. You may just learn that your or your vendor’s email or phone network have been compromised, and by taking the few minutes to verify the information, you may have just saved you, your company, and your vendor from being scammed.

FAQ

What is business email compromise?

Business email compromise (BEC) is a form of social engineering fraud where criminals impersonate executives, vendors, or trusted contacts to trick employees into authorizing fraudulent payments or sharing sensitive information. It is one of the most common causes of corporate payment fraud.

How does CEO fraud happen?

CEO fraud occurs when an attacker poses as a senior executive and sends an urgent payment request to the finance team. By exploiting authority and urgency, fraudsters pressure employees to bypass verification controls — resulting in business email compromise.

How do email phishing attacks lead to payment fraud?

Many business email compromise schemes begin with email phishing attacks designed to steal login credentials or build trust. Once access or credibility is established, fraudsters escalate to changing banking details or requesting wire transfers.

What is the best fraud prevention strategy for finance teams?

Effective fraud prevention for finance teams includes mandatory call-back verification, dual approval for payment changes, and strict adherence to established processes. Verification — not urgency — should drive payment decisions.

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