Insurer Aims to “Clawback” BEC Funds After £1.4m Success

A leading insurer has launched a new service designed to recover funds stolen from British businesses by online fraudsters, such as those running business email compromise (BEC) scams.

Coalition said it has already been able to return £1.4m ($1.8m) to a policyholder that was stolen in a “sophisticated social engineering attack” on a south-of-England law firm.

The new “clawback” service will see the insurer team up with a legal partner to locate and recover stolen funds from the British banking system, before an attacker can move them.

The “secret sauce” appears to be this unnamed national law firm’s knowledge of and relationships within the banking system, which enable it to move faster and with greater precision.

Read more on BEC: Manufacturing Firm Loses $60m in BEC Scam.

Laura Stewart, Coalition’s UK head of claims, said the firm would not be able to guarantee success every time, but that the newly established process would give it a better shot.

“While Coalition has been recovering stolen funds for US clients for some time now, the UK banking system is different: it moves faster, is harder to navigate, and UK banks are often more reluctant to communicate with third parties,” she explained.

“That’s why we’ve teamed up with a financial crime law partner. This relationship and new process give us the ability to communicate with the banks quickly and forcefully.”

Battling BEC and APP Fraud

BEC in particular continues to be a scourge for many organizations around the world. The FBI’s Internet Crime Complaint Center (IC3) claimed in September that BEC cost corporate victims nearly $55.5bn between October 2013 and December 2023, on the back of over 305,000 incidents.

It said that banks in the UK, as well as those based in Hong Kong, often act as intermediary stops for funds as they’re transferred to accounts under the control of the BEC fraudsters.

However, BEC isn’t the only show in town from a fraudster’s perspective. Authorized push payment (APP) fraud is also a significant threat to British firms – especially the SMBs Coalition says its service is intended for.

According to UK Finance, corporate victims lose on average just over £11,000 ($14,400) per scam. However, it can be much more: in one case last year, hairbrush manufacturer, Kent Brushes, lost £1.6m ($2.1m) in just 20 minutes through a flurry of APP fraud transactions.