FALL UPDATE: Welcome to our quarterly newsletter!
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Business Fraud and
Cybersecurity Best Practices
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By Wanda Borges
Since the onset of the coronavirus pandemic, the majority of businesses have employees working from home. Even as the states began to reopen from the mandated “lockdown”, many companies and employees alike found advantages to working remotely. While the new “normal” of working remotely has been beneficial to most people and companies, the door has been opened to cyberattacks.
Home computers or other remote locations are more vulnerable than ever to these cybercrimes. Business email compromises (“BEC”) became the number one cybercrime in 2020. In 2020, the FBI Internet Crime Complaint Center (“IC3”) received nearly 20,000 complaints about BEC, with reported losses due to the attacks increasing to $1.86 billion from $1.29 billion in 2018. The FBI defines BEC as a sophisticated scam targeting both businesses and individuals performing a transfer of funds and its website states that the scam is frequently carried out when a subject compromises legitimate business e-mail accounts through social engineering or computer intrusion techniques resulting in an unauthorized transfer of funds.
Credit professionals can be exceptionally vulnerable to cybercrime, which can be defined simply as internet fraud. The five elements of fraud exist in any cybercrime scenario: 1) the criminal is lying to you and trying to convince you that what they are saying or offering is true all the while 2) knowing that their statement is untrue and 3) using the statement [“click here”] to deceive you into opening an email or clicking on a link and you 4) justifiably rely on the statement believing it to be true which 5) causes harm to you (or your company) as a result of the falsehood.
The most common cybercrimes today are: Malware (includes Phishing, Ransomware, Trojan horses, crypto mining) – generically – Hacking, Debt or Credit Card Fraud, Data Breaches, Compromised Passwords, Business Email Compromises, and Social Media Access.
Companies need to create people-centric cybersecurity strategies to protect against these cybercrimes, particularly Business Email Compromises and Ransomware.
In that, this article is just a snippet of information available to the credit professional on cybercrimes and cybersecurity, it will focus on these two areas of cyberattacks. NACM Heartland will host a webinar in the near future for credit professionals to learn more about how to protect their companies from this kind of harm.
Business Email Compromises (“BEC”)
The chart below is a prime example of an attempted BEC. This is a copy of an actual email received by a corporate business account.
Click on Release, to free these messages to your inbox and to Verify your Mail Account : Deliver Messages
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Within this one email, there are five separate places which will open the door to the cyber-thief. By clicking on any of the four words “Release,” the door will be opened. Or by clicking on the phrase “Deliver all messages (3)” the door will be opened.
Ransomware
Ransomware is a type of malicious software, or malware, designed to block access to a computer system until a ransom is paid. Ransomware is generally downloaded inadvertently. You may visit a website and suddenly a message pops up on your screen. These are some of the common messages that we see:
- “Your computer is infected with a virus. Click here to resolve the issue”
- “Your computer was used to visit websites with illegal content. To unlock your computer, you must pay a $100 fine.”
- “All files on your computer have been encrypted. You must pay $500 within 72 hours to regain access to your data.”
Ransomware may even be hidden in a link from a company or person that you know. Always use caution when opening a link even from a person you know. If you suddenly receive an email that you weren’t expecting from a friend, client or colleague excitedly telling you to open the link because it is something you are going to want to see, DON’T. Call your friend, client or colleague (Yes – pick up the phone and call) and ask if he/she did, in fact send something to you. The odds are you will be told that he/she was hacked and that nothing legitimate was sent to you and that you should not open any link contained in an email because it did not come from him/her. Clicking on the link will immediately infect your computer.
More important than anything else - NEVER PAY THE RANSOM! Paying the ransom doesn’t work and will likely cause more damage to your computer.
Wanda Borges is an experienced attorney concentrating her practice in the fields of commercial litigation and corporate creditors' rights in corporate bankruptcies. She is a frequent contributes to NACM.
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This month we asked our board how the pandemic had changed the way they extended credit or managed credit lines. Here’s their insight.
Jennifer Leachman, President and CFO
Leachman Lumber Company
We didn’t make any obvious changes, even though we have more new credit applications than normal. We suspect there are more constructions projects because people had a chance to think about changes to their existing homes or design their dream homes. With this influx of new customers, we have committed to monitoring our delinquent accounts more closely.
Our credit limits have also been closely monitored. With the unprecedented rise in lumber and home building supply prices — lumber prices have nearly tripled in the last year — many customers bump up against their credit limits. We haven’t increased limits across the board. In some cases, we wait until it is requested. For some of more established clients who do not have delinquent accounts, we’ll adjust higher as needed when orders are placed.
Steve Stahl, Credit Officer
GWB
I’m sorry to say this, but we have not changed our underwriting at all. Nor has it changed how we manage credit limits. We continue to monitor our credit lines through borrowing bases. Some are monthly, some are when they need access to the RLOC (revolving line of credit).
Norm Honas, Credit Manager
Helena Agri-Enterprises, LLC
Nothing has changed the way we extend credit. We have not changed the way that we manage credit.
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Victor Clark Retires from the Board |
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Life happens.
That’s something we have been reminded of a little too often throughout the past 18 months. It is for this reason we recently said goodbye to Victor Clark, Senior Manager, Credit of the Renewable Energy Group, at the end of his board term in August.
The fact that Victor is moving back to Texas to assist his family in their time of need tells you all you need to know about his character, said Ty Knox a board member of both the NACM National and Heartland boards. “His unique perspective on credit and risk was always appreciated, but it was his helpful, “can-do” attitude, I will miss most.”
While he was with us for just one term, he was engaged and a valuable contributor to the board conversations.
“He brought with him the perspective of the Energy Group, which was a good thing for the board to be well-rounded. His expertise in that field will be missed along with the enthusiasm that he brought,” said Steve Stahl, immediate past chairman of the board.
Victor may be off the board, but we are happy to report he will continue to be a part of the Bio-fuels credit exchange group.
Thank you, Victor. We appreciate you!
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It's Scholarship and Awards Season! |
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The NACM Heartland board is seeking nominations for the 2022 Outstanding Professional of the Year, as well as accepting applications for two 2022 Credit Congress scholarships. Deadline for submissions is Wednesday, December 1.
Outstanding Professional
This award was created to honor the NACM Heartland member who goes above and beyond professionally. To be recognized for this award, the nominee must be a NACM Heartland member in good standing and have worked in the credit industry at least five years. The recognition comes with a paid full-delegate registration at the coming year’s Credit Congress and Expo.
2022 Credit Congress Scholarships
The successful NACM Heartland Scholarship applicant is working towards improving their standing as a credit professional. Points are awarded for activities such as education, including self-study courses and work towards a professional designation. The scholarship covers full delegate registration.
The Board also awards a Heartland Leadership Award that also provides a full-delegate registration to the 2022 Credit Congress. This award was created to honor the NACM Heartland member who goes above and beyond professionally. To be recognized for this award, the nominee must be a NACM Heartland member in good standing and have worked in the credit industry at least five years. The recognition comes with a paid full-delegate registration.
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Calendar
November
11-12 NACM Heartland National Ag Retail - Great Lake Regional Meeting, Angola
11-15 NACM Heartland Steel Credit Group Meeting, Bloomington
11-16 LC Series—Putting It All Together for Letters of Credit Success
11-17 Help! My Customer Filed Bankruptcy, How to Collect Your Debt When Your Customer is in Bankruptcy
11-18 NACM Heartland Construction Meeting
11-19 NACM and FCIB Present Author Chat: Good Comes First
11-22 Increasing efficiency and the customer experience using intelligent automation and RPA
11-23 Implementing a UCC Program: Overcoming Obstacles
11-25 HAPPY THANKSGIVING! Blessings to all
11-30 Implementing a Lien/Bond Claim Program: Overcoming Obstacles
DECEMBER
12-6 (GSCFM) Legal Environment of Credit
12-7 Due Diligence When Selling to Minority Contractors
12-9 NACM Heartland Board Meeting
12-17 NACM Heartland Construction Christmas Lunch
12-17 (FCIB Members Only) Global Expert Briefings - Trade Risks
12-25 Happy Holidays!
JANUARY
1-1 Happy 2022!
1-3 - 4-15 Accounting Online Course
1-10 - 4-10 International Credit & Risk Management Online Winter 2022 Course
1-14 Application Deadline for the March 7 Test Date
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Visit our website for more information!
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