U.S. Small Businesses See Big Increase in Phishing Emails: Munich Re/HSB Survey

U.S. small businesses have experienced a worsening cyber vulnerability over the last year: Suspicious emails seeking money.

Nearly 60 percent of business executives polled in a new survey from Munich Re’s Hartford Steam Boiler (HSB) said that suspicious emails had increased markedly over the past year, particularly those revolving around phishing schemes.

The concern is that small businesses will face increased cyber liability concerns as employees fall for phishing schemes and transfer company funds into fraudulent accounts.

“Whether it’s a phishing scheme, fraud or malware, most cyber-attacks start with an email,” Timothy Zeilman, a vice president for HSB, said in prepared remarks. “Even companies that have information security training and fairly savvy employees fall victim to these deceptions.”

With millions of Americans working remotely from home since the outbreak of the coronavirus, business email schemes could become an even bigger threat, Zeilman said.

“It’s more important than ever to pay attention to safe cyber security practices and make sure you verify requests for payments,” he said. “Don’t rely on email alone – call the person and confirm the payment is legitimate before releasing any funds.”

Other survey highlights:

• 37 percent of organizations responding said they received an email from someone pretending to be a senior manager or vendor requesting payments.
• Nearly half of employees receiving those emails (47 percent) responded by transferring company funds, resulting in losses most often in the $50,000 to $100,000 range (37 percent) and occassionally less than $10,000 (only 11 percent).
• The scam is convincing because cyber thieves in many cases gain access to business email accounts and assume the false identities of company managers, HSB said.

HSB conducted its survey by way of a contract with Zogby Analytics. The effort took place in October 2019 and involved 505 small to medium-sized businesses across the United States, it said. Seventy-five percent of the sample had annual revenue under $5 million and less than 100 employees. The final sample contained 41 percent of the businesses with fewer than 25 employees. Based on a confidence level of 95 percent, the margin for error is plus or minus 4.4 percentage points. That means all other things being equal, the identical survey would have results within the margin of error 95 times out of 100.

Source: Munich Re/HSB