Beazley saw fraudulent instruction incidents quadruple in 2017

Beazley saw policyholders incurring losses ranging from a few thousand dollars up to $3m (£2.1m), as fraudulent instruction incidents reported to its breach response services unit quadrupled in 2017.

The average claim amount for fraudulent instruction incidents last year was $352,000 (£247,000).

Fraudulent instruction scams occur when criminals use hacking or phishing to gain information that they use to send requests to transfer funds into fake accounts

Organisations may have to conduct exhaustive systems analysis to check that personal and private data has not been compromised, in addition to losing money. Ever-more sophisticated methods are increasingly being used to target organisations.

Katherine Keefe, global head of Beazley Breach Response Services commented: “Cyber-criminals are finding new ways of getting organizations to part with their hard-earned cash.  In 2017 we saw fraudulent instruction emerge as a new trend which offers significant reward for the perpetrators in return for little effort, but brings potentially devastating financial consequences for the victim. ”

Professional services accounted for 22% of all the scams reported to Beazley, while the financial services industry came in close second reporting 21% of the total. In third, retail reported 12% of Beazley’s total fraudulent instruction incidents.

According to Beazley’s data, incidents are growing across all sectors. Organisations are particularly vulnerable where large single transactions, for example in real estate, are involved.