FORT MILL, SOUTH CAROLINA — A business in Fort Mill is trying to rebound after falling victim to an email scam that cost it more than $1 million.
Shawn Lydon, Cindy Spragg and Joan Wunk run AlphaVets, a company that provides supplies for the government.
“Through last year, we were doing work for the government for disaster relief kits throughout the pandemic for underserved and underutilized areas,” Lydon told Action 9′s Jason Stoogenke.
One day, they got an email that they thought was from one of the vendors they owed money. The email was notifying them about a new account that they were instructed to deposit money into going forward.
“It wasn’t just a simple, ‘Hey, we switched accounts.’ They were very meticulous in the details that they shared,” Lydon said. “Discussing project details and personal details and ‘Oh, hey, we are going to change our account. Please use this moving forward.’”
They told Stoogenke they lost about $1 million. They also reported the scam to local deputies and the FBI.
“We can’t just eat this type of loss,” Lydon said.
It’s called the “business email compromise” scam and it involves someone hacking into a business’s email. Then the hacker emails each of the business’s contacts and tells them that they have a new bank account and to please use this account when making deposits.
According to recent FBI statistics more than 166,000 people fell victim to this scam over a three-year period and lost a combined $26 billion.
They told Stoogeneke that the banks did get some of their money back. “We were able to recover just under about a half a million dollars at this point so we’re still short $550,000,” Lydon said.
“Lack of sleep. There’s a lot of stress. We, just, every day we hope,” Wunk said.
“It threatens our business. It threatens whether we are going to survive this or not,” Spragg said.
The business owners wish their bank, Chase, and the bank they say the scammer used, PNC, picked up on the red flags sooner.
Channel 9 contacted the banks to find out what they are doing to help protect customers against scams such as this one.
Chase said it can’t comment because of “the restrictions and obligations we have around customer/client data privacy.”
PNC said it can’t talk about its “fraud-related safeguards” for “security reasons,” but it did send a document that offers tips and advice for small businesses.
Stoogenke suggests an easy way to avoid this type of scam is to call the vendor or client that the email is supposed to be from and ask if they have a new account – something all the victims Stoogenke has talked to over the years told him they wish they had done.
In addition, insurance companies sell crime insurance for businesses, including cyber insurance.
According to a recent study, the average policy costs about $1,500 per year for $1 million in coverage.
Be sure to read the policies carefully, however, so you know exactly what they do and don’t cover.
The FBI also has helpful information on its website here about this type of scam.
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