Prevent social engineering fraud: Essential tips for your business

Social engineering fraud is one of the fastest-growing threats facing businesses today. As organizations rely more on digital banking and remote work, criminals are finding new ways to exploit human vulnerabilities – often bypassing technical security controls entirely. Understanding these risks and knowing how to respond is essential for every corporate and commercial banking customer.

What is social engineering fraud?

Social engineering is a form of cybercrime where fraudsters manipulate people into revealing confidential information or performing actions that compromise security. Instead of hacking systems directly, these criminals use psychological tactics – posing as trusted partners, vendors, or even bank employees – to trick you or your team.

Common social engineering threats in banking

1. Business Email Compromise (BEC)

A scammer hacks or spoofs a legitimate business email account (like a CEO, vendor, or finance team member) and sends a convincing email to someone in the company – often someone in finance or HR – asking for a wire transfer, gift cards, or sensitive data.

The request often seems urgent and routine, so the victim doesn’t question it.

2. Vendor Email Compromise (VEC)

A scammer hacks into a vendor’s real email account or creates a lookalike (spoofed) email address.  The scammer then sends a legitimate looking invoice or payment request to a company that regularly does business with that vendor.

The goal of the scam is to get the company to send money to a fraudulent bank account – often without realizing anything’s wrong until much later.

3. Phishing, vishing, smishing and quishing

• Phishing: Fake emails that look like they’re from your bank or a trusted partner, asking you to click a link or share credentials.
• Vishing: Fraudulent phone calls, often using spoofed caller IDs, pretending to be bank staff or vendors.
• Smishing: Scam text messages that prompt you to click malicious links or provide sensitive information.
• Quishing: QR codes sent via email, text or even posted in public places, leading to fake websites that steal your data.

4. Spoofed bank websites

Criminals create websites that closely mimic legitimate financial institutions, tricking users into entering login details or making payments. Always use saved, bookmarked site information to connect to your bank.

Social engineering trends to watch

• AI-powered scams: Attackers use artificial intelligence to craft convincing emails, phone calls and even deepfake videos.
• Multi-channel attacks: Fraudsters combine email, phone, text and QR codes to reach targets, making scams harder to spot.
• Targeting mid-sized organizations: These businesses often have fewer resources dedicated to cybersecurity, making them attractive targets.

Best Practices: How to protect your organization

1. Multi-factor authentication (MFA)

Require MFA for all online banking and payment approvals. This adds an extra layer of security, making it harder for criminals to access your accounts.

2. Employee training

Regularly train your staff to recognize suspicious emails, phone calls and texts. Simulated phishing exercises can help keep everyone alert.

3. Payment controls

• Positive pay with payee verification: Ensure only authorized checks are processed, and verify payee names for added protection.
• ACH blocks and filters: Restrict electronic payments to pre-approved partners and review exceptions carefully.
• Account validation services: Use tools that verify the legitimacy of beneficiary accounts before sending payments.

4. Regular audits and monitoring

Monitor account activity and access logs for unusual behavior. Conduct regular audits to identify and address vulnerabilities.

5. Verification procedures

Always confirm payment instructions and changes in vendor details through a secondary channel, such as a phone call to a known contact.

6. Education

Stay informed about the latest scams. Your bank can provide updates and resources to help you and your team stay vigilant.

7. Incident response planning

Have a clear plan in place for responding to suspected fraud. Quick action can limit financial and reputational damage.

Final thoughts

Social engineering fraud is constantly evolving, but with the right strategies, your organization can stay ahead of the threat. By combining technology, training, and strong internal controls, you can protect your business, your clients, and your reputation.

For additional fraud prevention measures, read our comprehensive fraud prevention checklist.

Cyber threats aren’t going anywhere. At U.S. Bank, we offer in-depth knowledge and advanced solutions tailored to your needs. For specialized assistance and to learn more about protecting your organization, schedule a meeting with U.S. Bank experts.