Stop Being Scammed by Executive Impersonation

by Ashley Poynter

Content Manager

Trick or Treat… or Fraud? Stop Being Scammed by Executive Impersonation

As cyber threats get more clever, executive impersonation has become one of the scariest tricks haunting the vendor management world. This isn’t your run-of-the-mill phishing attempt; it’s far more devious.

Now, attackers are masquerading as your top executives—yes, the big names at your company to authorize fraudulent payment transactions. Unfortunately, it gets creepier: they’re using advanced AI tools that can mimic human voices and speech patterns. In other words, it’s harder than ever to tell who’s real and who’s a fraud.

But don’t freak out just yet. This post isn’t just here to give you nightmares. We’re going to walk you through what executive impersonation is, why it’s becoming a bigger issue, and how to slam the door on fraudsters trying to trick your team.

Ready to stop being scammed? Let’s dive in.

What Is Executive Impersonation?

Types of Executive Impersonation Attacks

Why Is Executive Impersonation a Growing Concern?

How to Mitigate the Risk of Executive Impersonation

The Culture of Exceptions: A Red Flag Waiting to Happen

Don’t Get Tricked by Executive Impersonation

Get Ready for Vendor Management Appreciation Day 2024

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What Is Executive Impersonation?

Executive impersonation has gotten a facelift. But before we get into that, let’s start with the basics: executive impersonation is a type of attack where scammers pose as the C-Suite or other high-level executives in your organization to trick employees into transferring funds or disclosing sensitive information. Picture this: Your “CFO” emails you asking for a quick payment to a new vendor. But instead of going to your legitimate vendor, that money goes straight into a scammer’s mule account. Pretty terrifying, right?

Even scarier is how convincing these attacks have become. With AI-powered tools like deepfakes, fraudsters can mimic voices and even create realistic videos of your CEO or CFO. It’s not science fiction—it’s happening now.Some companies have lost up to $25 million due to these attacks. Yeah, that’s an actual number.

How it works

Attackers use social engineering and email spoofing (or deepfakes, eek!) to pretend to be an executive at your organization (aka someone you trust).
They typically send urgent messages, creating pressure to skip the usual verification steps.
Sometimes, they may use AI-generated voices or videos to make the impersonation even more convincing.

Now that we know what executive impersonation is, let’s talk about the different flavors of this cyber trickery.

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Types of Executive Impersonation Attacks

Executive impersonation comes in a few creepy varieties, each with its own way of weaseling into your company’s wallet or data.

Business Email Compromise (BEC)

BEC is the bread and butter of executive impersonation attacks. In many ways, it’s the umbrella under which many other sub-types of scams fall. Here, fraudsters send what appears to be an internally generated email that looks like it’s from a real person (one of your vendors, your CFO, etc.). It might look like it’s a real email address due to some trickery (using an “rn” instead of an “m” e.g. torn.reynolds@xyzco.com to make it look like the email is coming from “Tom Reynolds” ). In the worst cases, fraudsters are able to gain access to an executive’s email account and send emails that way. Those are super hard to spot because it will come from the person’s actual email address. Employees, eager to please and not wanting to upset “the boss,” comply without question.

Whaling

If phishing is casting a wide net, whaling is targeting the big fish—executives themselves. These attacks use sophisticated social engineering to get directly to decision-makers or those close to them. The goal? Huge payouts in the form of wire transfers. These attacks specifically target only higher-ups in an organization, in the hopes that their decision-making abilities or unique access to highly sensitive data will yield more lucrative opportunities for scammers.

CEO Fraud

This one’s a classic. A scammer pretends to be the CEO, often requesting an urgent transfer of funds under false pretenses. Because the request comes from the “CEO,” employees feel pressured to act quickly, bypassing security checks in their rush to get things done. These can be really tricky attacks as bad actors now use a wide range of means to impersonate the CEO, including phone calls, zoom (deepfake) meetings, personal email addresses, and text messaging.

Why Is Executive Impersonation on the Rise?

So, why is executive impersonation such a big deal? The short answer: the perfect storm of remote work, a lack of awareness, advanced AI tools, and a culture of exceptions…More on that last one later because it deserves its very own section.

Lack of Awareness

Many employees don’t receive proper training on how to spot these kinds of sophisticated scams. Sure, they might know not to open a sketchy link in an email from “Prince of Nigeria,” but would they be able to tell if the CFO just asked for a last-minute transfer via a seemingly legit email?

Remote Work Vulnerabilities

Remote work has expanded the attack surface for fraudsters. Home offices are usually less secure than corporate environments, and employees are more likely to fall for impersonation scams when they cannot simply walk over to their boss’s office to confirm a request. Email and chat platforms are prime hunting grounds for fraudsters looking to exploit these vulnerabilities.

Advanced AI Tools

Here’s where things get particularly spooky. Fraudsters are now using deepfake technology to mimic voices and even create realistic videos of executives. Suddenly, distinguishing between real and fake isn’t as simple as looking for grammatical errors or suspicious links. This isn’t your grandma’s phishing scam—these attacks are slick, convincing, and dangerous.

Another simple explanation for how and why fraud squeaks through is that people are busy! Tom Rogers of Vendor Centric talks about the challenges of balancing fraud prevention with an already-full vendor management plate:

How to Mitigate the Risk of Executive Impersonation

Let’s be honest: Executive impersonation is scary. But the good news is, you’re not completely helpless. There are several strategies your company can use to mitigate the risk of falling for one of these costly scams.

Establish a Verification Protocol

First things first—don’t rely solely on email for sensitive requests. Develop a system where employees must verify executive requests through a second channel (phone, secure messaging platform, etc.). This alone can derail some fraud attempts. However, your efforts shouldn’t stop there. You should also:

Define a process: Write It Down! Make sure every employee knows the exact steps for verifying requests. And by “everyone,” we mean everyone. Listen to Christopher Arehart of Chubb highlight the importance of writing your process down and the rigor required to stop bad actors in 2024 and beyond:

Multiple approvals: No one person (not even the boss!) should have the final say in authorizing financial transactions. Implement a system where significant transfers require approval from more than one person.

Employee Training and Awareness

If your employees don’t know what executive impersonation looks like, how can they defend against it? They can’t. That’s why training is key. Conduct regular sessions to teach your staff how to spot phishing and impersonation scams. Spoiler alert: It’s not just about spotting typos in emails anymore.

Run phishing simulations: Keep your team sharp by running simulations that test their ability to detect scams.
Encourage a report-first mentality: Create a culture where employees feel comfortable reporting suspicious activity, even if it turns out to be a false alarm. You’d rather they be safe than sorry.

Implement Multi-Factor Authentication (MFA)

This one’s a no-brainer: multi-factor authentication adds an extra layer of security. Even if a fraudster gets their hands on your login credentials, MFA can stop them from doing anything with it.

Deploy MFA on all systems: This includes email, VPN access, and financial accounts. Make sure that MFA is mandatory, not optional.
Mandate strong, frequently updated passwords: We know—no one likes changing passwords every few months, but it’s better than letting a scammer waltz in with old credentials.

The Culture of Exceptions: A Red Flag Waiting to Happen

Here’s one more thing to keep an eye on: your company’s internal culture. Specifically, a culture that allows too many exceptions to standard procedures. Maybe your CFO frequently asks for “just this once” favors, or your finance team feels pressured to skip protocol when under a time crunch. Fraudsters love environments like this because they easily slip in unnoticed when rules are regularly bent. Hear Angela Sarno, VP of Marketing at PaymentWorks, highlight the severity of the culture problem and why your process is useless if nobody follows it:

How to fix it

Create a no-exceptions policy: If a request doesn’t go through the proper channels, it doesn’t happen. No matter who’s asking. Automation can help enforce this, ensuring that every transaction follows the same secure process.
Automate, automate, automate: Manual steps introduce human error, and human error opens the door to fraud. Automation reduces human error and makes it harder for fraudsters to trick someone into bypassing security protocols.

Don’t Get Tricked by Executive Impersonation

Executive impersonation is the real-life horror story of the modern workplace, but you don’t have to play the victim. By putting clear protocols in place, training your employees, and leveraging the right tech tools, you can prevent these attacks from costing you big time.

It’s time to treat your company’s cybersecurity with the seriousness it deserves—and stop getting tricked by fraudsters posing as your CEO. In the world of cyber threats, vigilance isn’t optional; it’s critical.

Remember, in this game of trick or treat, you’re in control of who’s knocking at your door.

Get Ready For Vendor Management Appreciation 2024

The clock is ticking down toward the second annual Vendor Management Appreciation Day (VMAD)! Will you be partying with us? You should!

As a refresher: vendor managers are our heroes! And we believe there’s no expiration date on honoring this very important, very under-recognized role.

Join us in observing Vendor Management Appreciation Day (VMAD)! We’re gearing up for the 2024 celebration, and we want you to be a part of it!

VMAD is a new holiday geared toward unifying vendor management professionals and celebrating innovation in the field.

Moreover, we’ve released gifts each month to help you supercharge your vendor management efforts. Additionally, we’re planning some awesome events so everyone can connect and celebrate the important, strategic role of vendor management.

In the meantime, learn more here, and grab some free vendor management goodies.