Home Security Law firms lose millions of dollars to simple email scam: MailGuard

Law firms lose millions of dollars to simple email scam: MailGuard

Fraudsters used scam emails to steal millions of dollars from Queensland law firms in December, according to security firm MailGuard.

The company says it was noteable that the fraudsters didn’t attack the law firms by hacking into their networks or infecting their computers with a virus – they just sent them an email.

“It was textbook social engineering. The lawyers who fell for this scam were targeted with phone calls from people who said they were seeking legal representation. The phone calls seemed legitimate; after explaining their problems the callers promised to email the lawyers with ‘important documents related to their cases,” said MailGuard’s Emmanuel Marshall in a blog on the security firm’s website.

“When the lawyers received the emails they found links to a file-sharing site. They clicked on the links and were required to enter their email account passwords to gain access. This whole process was a trick designed to collect the lawyer’s email login passwords.

“Lawyers are smart people, right? Not the sort who easily fall for scams. But the criminals who executed this fraud gained their trust by speaking to them on the phone so that when the scam email arrived, the victims were primed and waiting to click on the malicious link it contained."

Marshall said that once the scammers gained access to the lawyer's email accounts, they moved to phase two of the scam, monitoring the firm's email traffic for invoices requesting payment.

“When they saw a suitably large invoice arrive in the firm’s inbox they sent a bogus message with false bank account details so that the payment went into the bank account of the scammers instead of the law firm.”

Speaking to the Brisbane Times — which originally broke the story about the law firm scam — Christine Smythe, president of The Queensland Law Society, said, “They are quite cunning... They are people who speak good English, answer in a convincing away and come with a backstory... The precise method of attack varies, but the essence is that the criminals obtain access to the firm’s email accounts and use this to misdirect funds.”

“People are not machines. We make a lot of decisions based on emotional responses and social cues. We haven’t got the mental bandwidth to parse every communication and verify its authenticity. Like the lawyers who fell for the email scam in Queensland, we’re all prone to making errors of judgement and that’s the security gap cyber criminals can most easily exploit,” says MailGuard’s Marshall.

“Social engineering is a booming crime category because cyber criminals understand that it’s easier to deceive a person than a machine. TechBeacon’s ‘2016 Cyber Security Trend Report’ reveals that 65% of professionals identify social engineering as the most serious security threat to their business.

“Human beings are still the gatekeepers of valuable data. Bank accounts, file storage, credit card details; they are all protected by passwords and those passwords can be obtained with trickery because they are stored in human brains.

“Hacking into a company using social engineering techniques is as simple as sending a cleverly worded email to people who work there. If criminals can trick one person into clicking on a malicious link or logging into a compromised website, they can use that person as an access point to the company’s most valuable data.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).