Business Email Compromise, ACH Transactions, And Liability
Security Boulevard, Thursday, March 27th, 2025
Any business today sends, receives and pays invoices for goods and services. In almost every case, these invoices and payments are sent, approved and paid electronically.
Such electronic invoices, with modern payment systems including wire transfers, ACH transfers, Venmo, PayPal, or even cryptocurrency transfers are fast, efficient and effortless. They are also a target for computer hackers and fraudsters, who find them fast, efficient, effortless and lucrative.
The fraudsters often target the email systems of the supplier or recipient, falsifying payment instructions to divert funds intended to pay for services to their own accounts or their own use. In these scenarios, it is often difficult to determine who is liable for the fraudulent transfer and who must make the victim of the transfer whole. In many cases, it will depend on who had the best ability to prevent, detect, or respond to the fraud scheme, and this may not always be obvious.