In the complex world of the construction industry, where large sums of money are constantly changing hands, the risk of wire transfer fraud poses a significant threat to businesses. Fraudulent wire transfers within the construction sector can have devastating consequences, leading to financial losses, damaged reputations, and legal repercussions. Understanding the nature of these risks and implementing preventive measures is crucial for safeguarding against fraudulent activities.
Unauthorized changes to payment information are one of the most common malicious bouts GBQ’s IT Services team encounters. Common tactics used in fraudulent wire transfer schemes include phishing emails and compromised vendor accounts. Fraudsters may impersonate legitimate vendors or executives to deceive employees into changing payment information causing you to pay into fraudulent accounts. The fast-paced nature of construction projects and the pressure to meet deadlines can further increase the likelihood of employees falling victim to these schemes.
To mitigate the risks associated with fraudulent wire transfers, businesses should consider the following actions:
Employee Training: Educate employees about common fraud schemes, phishing tactics, and proper verification procedures for financial transactions.
Dual Authorization: Require dual authorization for all wire transfers above a defined threshold to ensure accountability and oversight. Additionally, requires dual authorization for any changes to a business’ payment information.
Vendor Verification: Establish procedures for verifying vendor identities and account information before processing payments. When a vendor requests a change to their information, verify the change by an external means, such as a phone call, using contact information from a reputable source. Never use the contact information found in the same email requesting the change.
Fraudulent wire transfers pose a significant threat to the construction industry, highlighting the importance of proactive risk management strategies. By raising awareness among employees, implementing stringent verification processes, and investing in cybersecurity measures, construction companies can strengthen their defenses against fraudulent activities. Contact GBQ’s IT Services team to learn more about building your cyber defenses and efficiently managing your cybersecurity program to stay ahead of today’s threats.
Article written by:
John Stuart
Senior Cybersecurity Analyst
