In CEO fraud, a criminal poses as a manager and sends e-mails to employees asking them to transfer a large sum of money. Often to a foreign 'acquaintance'. With today's technology, fraud can be even more devious. With deep voice and deep fake, fake phone calls and fake video calls are indistinguishable from the real thing.
Here's a (fictitious) example:
The CFO at an ICT company receives a call from someone posing as the CEO of the mother company. The company is a fast-growing technology group with six offices across the Benelux. The CFO knows the CEO quite well. They met in person two years ago, and every month they have a video call with the finance directors of the other sites.
So the voice on the phone sounds familiar. For a while they talk about the weather and the weekend. Then the CEO explains why he's calling: it's an emergency. A sum of 220,000 euros needs to be transferred immediately to a Hungarian supplier. It's an urgent transaction in progress. As the voice was very convincing, the CFO had no reason to doubt its sincerity. He immediately transfers the money, as requested.
It is only later, when no confirmation of receipt of the amount arrives, that doubts arise. It soon became clear that this was a scam. The CEO's voice was imitated using "deep voice" and "deep fake" technology. The tone, intonation and accent all matched. The voice sounded completely authentic. By the time the fraud was discovered, the money in the foreign account had, of course, already disappeared.
How can this situation be avoided?
CEO fraud is a growing problem, particularly with the increasing development of advanced technologies. Some measures:
CEO fraud: more common than you think
CEO fraud falls into the category of identity fraud. In this type of fraud, the criminals impersonate someone else (for example, a customer or colleague). Of all frauds committed externally, around 30% involve identity fraud, of which more than 10% are chairman frauds (according to Allianz Trade's annual fraud survey).
CEO fraud often targets companies with international contacts, such as those in the industry, trade and logistics sectors. In these sectors, large international payments are not uncommon, making it easier to conceal fraudulent transactions.
How can you protect your business?
Of course, it's a good idea to take solid measures (see the paragraph on our prevention tips). But even so, the risk of CEO fraud remains. There is no such thing as zero risk. To prevent your company suffering a significant loss as a result of fraud, Allianz Trade offers fraud insurance that can be tailored to suit every type of business.
What does Allianz Trade's fraud insurance offer?
It is an illusion to think that your company will be 100% safe from CEO fraud. Criminals are far too clever for that. The methods they use are increasingly sophisticated. No matter how careful you and your staff are about security, your business can suffer serious damage.
With Allianz Trade's fraud insurance, you protect your business against losses caused by fraud (both internal and external). Our insurance covers not only financial losses, but also damage to systems and reputation. What's more, you can count on expert advice to help you avoid fraud.