As micro, small, and medium-sized enterprises (MSMEs) expand into international markets, they become prime targets for impersonation scams. These fraudulent schemes not only threaten financial stability but also damage hard-earned reputations and erode customer trust. Understanding how these scams operate and how to protect against them is crucial for safeguarding business operations.
What Are Impersonation Scams?
Impersonation scams involve fraudsters posing as legitimate entities—business partners, government agencies, or even internal employees—to manipulate victims into divulging sensitive information or transferring funds. According to the Federal Trade Commission (FTC), business imposter scams were the most reported fraud subcategory in 2023, with government imposter scams ranking third. Together, they accounted for nearly half of all fraud reports, with total losses exceeding $1.1 billion.
Beyond the immediate financial loss, these scams can have long-term consequences. Customer trust and investor confidence may decline, potentially disrupting business operations for years.
A Close Call: When Scammers Targeted My Business
You might think, “That will never happen to me.” But think again.
Recently, my own company faced a couple of close calls with impersonation scams. In one instance, a scammer posing as me instructed an employee to buy seven $200 Apple gift cards and send photos of the card pins. The email seemed urgent and legitimate, designed to pressure quick decision-making, and my teammate nearly fell for it. She was at the Apple Store about to purchase the cards when she thought to call me and check that it was a legitimate request from me… and realised that she’d been tricked.
In another case, an employee received an email—supposedly from a trusted colleague—requesting bank details to “update payroll records.” The email looked convincing until the employee noticed inconsistencies in the sender’s address.
Thankfully, both employees were cautious. They stopped further communication and reported the incidents to me and our information security team. These incidents were a wake-up call: No one is immune, and scammers are becoming more sophisticated.
The Scary Evolution of Impersonation Scams - Deepfakes
The rapid advancement of AI has made impersonation scams even more deceptive, particularly with the rise of deepfake technology. Deepfakes use AI-generated video, images, or audio to convincingly mimic real people. Fraudsters exploit this to impersonate CEOs or senior executives, tricking employees into transferring funds or revealing sensitive information.
One of the most alarming cases occurred in 2024 when an employee of a multinational company received an email, purportedly from the UK-based CFO, requesting an urgent fund transfer. To verify the request, the employee joined a video conference where scammers used deepfake technology to impersonate the CFO and other executives. Believing the call was real, the employee transferred $25 million—only to realize afterward that it was a scam.
McAfee’s 2024 AI Threat Report found that deepfake-powered fraud attempts increased by 300% from the previous year, making it a growing risk for businesses worldwide.
What You Can Do to Protect Your Business
While scams have become more elaborate and sophisticated, these are some ways that you can protect your business from impersonation scams:
#1. Enhance Verification Processes: Implement multi-factor authentication (MFA) and establish strict verification protocols for financial transactions. This could involve having multiple layers of approval before transferring funds or confirming requests through direct communication channels before proceeding.
#2. Employee Education and Training: Regularly train staff to recognize signs of impersonation scams, such as unsolicited requests for sensitive information, unfamiliar email addresses, or urgent financial transfers. Employees are your first line of defense.
#3. Leverage Advanced Technologies: Utilize AI-driven tools to detect anomalies in communications and transactions. Implement biometric authentication methods, such as fingerprint scans and facial recognition, to enhance security.
Conclusion
Impersonation scams are evolving, and MSMEs must remain vigilant. From classic email scams to AI-powered deepfake fraud, the risks are higher than ever. Strengthening internal verification processes, educating employees, and leveraging cutting-edge security tools can help prevent costly mistakes. No business is too small to be targeted, and in today’s digital age, proactive defense is the best strategy against cyber fraud.
If you’d like to make your business cybersecure, reach out, and we’ll set up a chat with our information security team.
