Combatting Misdirected Payments: How PLM Protects Your Business
As technology continues to revolutionize every aspect of our lives, the lumber industry is experiencing significant changes. Innovations like contactless payments have streamlined operations and boosted productivity. However, these advancements also introduce new challenges. One significant issue that has emerged is the rise in misdirected payment fraud—a costly threat that lumber businesses must address proactively.
Understanding Misdirected Payment Fraud
Misdirected payment fraud is a cunning scheme where attackers manipulate businesses into redirecting payments to fraudulent accounts. The process often begins with the bad actor sending you an email that seems legitimate and like it is from a customer. Threat actors then gain access a staff member’s email and surveil ongoing conversations to learn the communication style and identify key contacts. Once they feel confident, they send a fake invoice from the compromised email, requesting a change in routing numbers for payment.
Businesses unknowingly send money to the threat actors instead of the intended vendor, leading to substantial financial losses. The consequences of such fraud can be severe, with losses ranging from $30,000 to $80,000, and in extreme cases, soaring to $200,000. Beyond the immediate financial impact, these incidents expose sensitive customer and employee information, potentially leading to broader security breaches.
We recommend putting procedures in place to keep this from occurring at your business. Here are four examples:
- If a vendor’s routing number changes from one invoice to another, call the vendor to verbally confirm the change in case the vendor’s email has been compromised.
- Set up a confirmation process for you and your vendor before any invoices are issued.
- To safeguard against misdirection scams involving senior executives, establish with your bank a procedure for approving large payments.
- If you suspect a misdirection scam, alert the vendor being impersonated that their email system has been compromised to decrease the odds of it happening again.
PLM’s Comprehensive Coverage
Recognizing the gravity of this issue, Pennsylvania Lumbermen’s Mutual Insurance Company (PLM) has expanded its cyber offerings to include specific coverage for misdirected payment fraud. This new coverage is designed to activate when a business falls victim to a wrongful transfer event.
Once the coverage is triggered, the coverage provides reimbursement for the fraudulently obtained amount up to a limit. This ensures that businesses are not left to bear the brunt of these sophisticated scams alone.
Proactive Risk Management with Cyber Safety
In addition to financial coverage, PLM offers a holistic risk management solution through Cyber Safety. Key features of Cyber Safety include:
- Website Monitoring: Regular scans for vulnerabilities in web applications, providing detailed reports and recommendations to fix security gaps.
- Security Training: Customized cybersecurity training for employees based on individual assessments, enhancing overall awareness and preparedness.
- Security Policies: Templates for creating comprehensive cybersecurity policies, including data breach response plans and information security standards.
- eRisk Hub Access: A portal offering a wealth of resources, from incident response plans to online training modules and risk management tools.
Why Choose PLM?
As the oldest and largest mutual insurance company serving the lumber and building material industry, PLM brings unparalleled expertise and dedication to its clients. We understand the unique challenges faced by businesses in this sector and provide specialized support to mitigate emerging risks. Our comprehensive approach combines financial protection with proactive risk management, helping you safeguard your business against the ever-evolving landscape of payment fraud and cyber threats.
To learn more about how PLM can help protect your business, visit www.plmins.com or contact us at CustServ@plmins.com or 1-800-752-1895. Together, we can build a more secure future for your enterprise.
