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Taking the Proper Steps to Protect Yourself from Phishing Scams Amid Banking Volatility

Mar 20, 2023

On Friday, March 10, 2023, the Federal Deposit Insurance Corporation (FDIC) shut down Silicon Valley Bank (SVB), followed quickly by the closure of Signature Bank and others. These events started a spur of banking uncertainty for customers across the nation, promoting many to re-consider their current relationships. Many are moving funds. 

Amid uncertainty, many fraudsters and cyber criminals see opportunity. It’s more important than ever that business leaders think proactively and protect themselves against fraud.  

Here are a few things to keep in mind to mitigate the risk for fraud and phishing scams amid banking uncertainty. 

Implement Controls to Mitigate Risk 

If you make the decision to move some or all of your funds, it is important to make sure that you don’t fall victim to a phishing scam which diverts your transfer to an unintended account. Consider implementing controls that can minimize this risk, including: 

  1. Update your security software.
  2. Enable multi-factor authentication for all email accounts.
  3. Create flags within your email system to identify emails where the “reply” address differs from the “from” address.
  4. Add an email banner to messages received from external senders.
  5. Check your procedures for retaining email logs – you should retain them for several months. 

Vet Your New Institutional Partners Properly 

When you’re looking for new banking relationships, vet your potential partners thoroughly. When you are initiating a transfer of funds to a new bank, take the following steps to reduce the risk of fraud: 

  1. Follow your organization’s approval procedures for wire transfers.
  2. Confirm the bank routing information with your contact at the receiving bank orally as well as through email.
  3. Do not pressure your employees to get the transfer done quickly at the cost of proper procedures. 

If you receive a change in payment instructions from a business partner, similar steps should be considered: 

  1. Confirm with your contact at the business partner the new bank instructions orally as well as through email. You should reach out to the contact at the business partner using a known contact email or phone number, not the contact information noted on the changed payment instructions.
  2. If your payment is dependent on the receipt of funds from another source, wait until the other source clears before sending a portion on to your business partner.
  3. Resist pressure to get the transfer done quickly at the cost of proper procedures. 

At the end of the day, preventing fraud and scam attempts starts with proactive planning and control implementation. Especially during times of crisis, stay safe and keep risk mitigation top-of-mind with all operations.  

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David Sumner

David Sumner is a director in the Financial Advisory Services Group with years of auditing, forensic accounting, financial reporting and internal control design and implementation experience serving clients in a variety of industries.

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