An attacker compromises or spoofs an email account and sends fraudulent payment instructions. Disputes arise between the payor, payee, and financial institutions over who bears the resulting loss.
Imposter rule and comparative fault analyses apply.
Alternative Names:
BEC Claim|Wire Fraud Diversion Claim
Why it Matters?
Loss allocation frequently turns on which party was better positioned to prevent the fraud, and courts have applied comparative fault where both parties failed to verify instructions or detect account compromise, which makes the forensic question of whose systems were breached central to the analysis. Verification callback procedures using previously known numbers are the control that defeats these schemes and their absence supports fault findings.
Frequently Confused with
Related terms
Frequently asked questions
How is loss allocated?
What control defeats these schemes?
