'Fake president' fraud on the rise, Deloitte warns

Organised criminals' latest advanced scheme mimics senior executives and forces hapless employees to sign over cash

Fraudsters are conning companies into parting with their hard-earned profits through a scam known as ‘fake president’ fraud, accounting giant Deloitte has warned.

The firm has issued a warning to all its global clients and partners, urging them to be on their guard and to always stick to protocol when handling financial transactions, regardless of how convincing the fraudsters are.

According to Deloitte, the scam works by convincing an employee of a company to make an emergency bank transfer to a third party under the guise of paying off a company debt, sealing a contract or making a deposit.

A statement on Deloitte’s website said: “We wish to draw the attention of our clients and suppliers to a wave of frauds affecting many companies at the moment. We recommend our clients and suppliers to stay vigilant.”

“These type of frauds are created by well-organised criminal organisations with a complete knowledge regarding the market, structure and customers of the companies they are attacking," it added. "This knowledge is used to give them all necessary arguments to convince their victim and act in the wanted direction,”.

The fraudsters impersonate a group executive such as the president, CEO or CFO for example, or a trusted partner such as lawyers, auditors, accountants of the company.

They contact a specific employee’s company by reaching a manager or any employee they deem useful to their venture, either by phone (imitating a voice) or emails (using the company signature), requesting an urgent bank transfer to a foreign bank account.

Deloitte said the criminals use persuasive dialogue to be convincing such as: “It is an order to do this”, “I count on you for your efficiency and discretion”, and “The success of the project rests on your shoulders”.

The transfer is then done manually using a direct phone call or fax to a bank, following the target company’s procedures for urgent business transactions.

Deloitte said there were several ways to avoid falling victim to this scam, including making all staff aware of the issue, and ensuring they respect standard working procedures, while remaining alert to any requests they may find suspicious and using their own intuition.

It also said to verify the legitimacy of the request by calling back the person using the contact information stored in the contacts, and not numbers given out during a call or email.