Commercial email fraud dupes 179 Hong Kong and overseas companies, bilking US$51 million in first quarter of 2019
- Police handled 887 reports of commercial email scams in 2018, involving the loss of HK$1.71 billion. In 2017, firms lost HK$992 million
Commercial email fraud duped nearly 180 Hong Kong and international companies out of more than HK$403 million in the first quarter of 2019 – but one firm from Kuwait managed to recover US$17 million (HK$132.6 million) with the help of local police.
Police said on Friday the number of businesses, 179, that reported email fraud in the first three months of the year was down 6 per cent – from 191 in 2018. The amount of swindled funds, however, jumped 22 per cent from HK$330 million over the same time, according to police.
The details of the case were typical of corporate email fraud: in March, swindlers impersonating a senior executive from a subsidiary of the Kuwaiti company sent emails requesting money be transferred into a specific Hong Kong account.
Local police were notified when the parent company realised it was a scam and filed a report through a lawyer.
Police are still looking for the holder of the bank account.
Online and phone scams cost Hongkongers HK$3 billion in less than a year
A law enforcement source said it was possible the subsidiary company’s computer system was infected with a virus or hacked, giving scammers access to information about the business and the relationship with the defrauded company.
“The information was then used to convince the parent company to transfer money,” the source said.
Last year, police handled a total of 887 reports of commercial email scams, involving the loss of HK$1.71 billion. In 2017, 683 companies were conned out of HK$992 million.
In the first quarter of 2019, the anti-fraud squad received 388 requests to block payments totalling more than HK$1.42 billion. The fraud transfers were halted before they reached scammers’ bank accounts in Hong Kong, mainland China and other countries.
Email scams con nearly HK$760 million out of more than 400 firms
The number of requests was a 40 per cent increase, compared to 278 cases involving HK$813 million in the same period last year.
Hong Kong police have urged individuals and companies to verify the identities of contacts and to make sure a request is legitimate before transferring money.
Police recommend companies set up confirmation procedures and multiple approval mechanisms to verify the identity of the recipient of funds and the genuine purpose of the transfer.
