Mattel Exec Falls for Chinese Spoofing Scam, Loses Over $3 Million
Written By: Christine Dantz
April 2016
No, it wasn't an April Fool's joke, Mattel really lost more than $3 million after falling for the oldest trick in the in-box. A newly hired finance executive (who may be an ex-employee now) received an email from the "CEO" requesting a new vendor payment to China. After double-checking what appeared to be a legitimate email, the executive approved the payment and notified the CEO. That's when things got scary for the new CEO Christopher Sinclair, who never sent the email requesting payment.
What happened next may shock you, or it might not surprise you at all. The CEO of a major corporation does the same thing the average American does when they realize they have made a bank error. He called the company's bank, and the bank gave the CEO the same line it gives the average American,
"Sorry, there's nothing we can do to help."
Frantic, Sinclair contacted the FBI, because a $3 million spoofing scam is fraud and a serious crime. The federal law enforcement agency gave the CEO the same song and dance as the bank. There was nothing they could do. This type of fraud is nothing new to the FBI. According to its own statistics, between Oct 1, 2013, and December 1, 2014, American businesses lost $179 million in related email scams.
But in all fairness, the FBI has been weighed down by technical issues. It even has a spoofing problem of its own. In March, the agency reported that scammers were spoofing the agency's phone numbers. For more information on fake FBI phone numbers, the agency advises you to give them a call.
The attack on Mattel wasn't a mom and pop hack, it was a sophisticated, well-planned attack. The suspected Chinese hackers tapped a small enough hole into the company's security to learn about its accounting procedures. After the breach, the hackers had enough to convince one, new, finance executive.
While the toy maker got lucky, and the company was able to stop the transaction because of a bank holiday in China, it still cost Mattel thousands of dollars to fix and left the company looking weak and foolish. Many businesses and people aren't so lucky when dealing with the banks in China, and the scammers laugh all the way to the bank as they cash in on your hard-earned money.
With the FBI and major American corporations failing, across the board, in cyber security, what can the American people do to safeguard their digital assets?
References
FBI: $1.2B Lost to Business Email Scams. (2015, Agust 15). Retrieved from Krebsonsecurity.
Kinetz, E. (2016, March 29). Matell fought elusive cyber-thieves to get $3Mout of China. Retrieved from AP.
Scammers Spoofing FBI Phone Numbers to Fool Victims. (2016, March 16). Retrieved from The FBI Federal Bureau of Investigation/St. Louis Division.
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