MSPmentor Blog

Don’t Take the Bait; Spear Phishers Trying to Reel in Big Tax Returns

January to mid-April is the prime time for criminals to try to convince susceptible employees to hand over private company information, including tax returns, company bank account information, and employee information including healthcare and W-2 files.

Taxpayers, company accountants and IT admins, take heart: The IRS isn’t the only group that’s interested in your tax return. Criminals leverage unencrypted email, poor firewalls, and general social engineering to steal taxpayers’ and organizations’ returns in hopes of garnering a refund and/or nonpublic information (NPI)—and it’s arguably easier for them to do it than filing a return.

Email should be considered as secure as the server it’s hosted on, which--depending on the server--could be either extremely secure or extremely vulnerable. Normally, a cybercriminal looking to steal some returns will try to hack the server, which is why it’s good practice (and, in some cases, federally or state-mandated) to transmit financial information, including corporate tax returns, via encrypted messaging. If cybercriminals can’t get access to the server, their next best option is to target those who have access, like an IT admin.

January to mid-April is the prime time for criminals to try to convince susceptible employees to hand over private company information, including tax returns, company bank account information, and employee information including healthcare and W-2 files. Many organizations naively believe that this could never happen to them. However, a quick search online can usually show the prevalent dangers of these sorts of attacks. Companies like Snapchat, Seagate, Polycom, Advance Auto Parts, and, yes, even hospitals, schools, and utility companies have all been victims of spear phishing.

At AppRiver, we have seen the spike in phishing traffic already occurring this tax season. The beginning of the year is typically when taxpayers anticipating big refunds rush to have their returns filed, while taxpayers who owe usually procrastinate until the last second. For these reasons we anticipate that phishing traffic will continue to dwindle until the very end of tax season, with perhaps another small push toward the deadline.

So, how do criminals identify a potential target? It’s easy. First, they’ll search for a company on social media sites like Facebook and LinkedIn. Nowadays, it’s more uncommon than not for social media users to list their employment on their social media profiles, or even have a dedicated online resume (on LinkedIn, for example). In a company with more than 50 employees, odds are at least one person from finance has listed his or her employment on a social media account.

After choosing a target, the criminal will either spoof the company’s domain to create an email address that appears to come from a high-level executive, like the CEO, or create a similar one that most employees wouldn’t catch. An example would be using .net instead of .com, or adding an extra letter in the domain.

When an outside criminal crafts an email in such a way that it looks to be internal, some users will trust them without digging deeply enough. And that’s the core component to spear phishing. A criminal doesn’t need to be a hacker or gain access to secure internal systems. If someone can send convincing, legitimate-appearing emails, employees may hand over sensitive information and be none the wiser.

While right now this tactic is used to get W2s, NPI and tax returns, tactics along the same lines are used year-round--for example, using wire transfer fraud emails to dupe employees to wire tens of thousands of dollars from companies’ accounts to dummy accounts set up by the criminals. The FBI refers to these as Business Email Compromise (BEC) messages. The broader interpretation is any external email that claims to be from an internal user (like the CEO) who wants an employee to do something that compromises the integrity of business operations. This is a very dangerous attack vector because of how successful it is. The total damage companies face is in the millions each year.

So how does one avoid spear phishing, wire transfer fraud and BEC year round?

Unfortunately, there’s no panacea when it comes to blocking spear phishing attempts. However, there are some steps an organization can take to combat them:

  • Use encrypted email. It should be company policy that certain bits of sensitive data should always be encrypted when sent via email. Ideally, no such information would ever be sent externally; but, if it was, with this protocol the data would still ideally remain secured and unusable by the third-party.
  • Look at the recipient address when replying. A quick glance to the “To:” address when replying could potentially stop many of the spear phishing attacks. Criminals like to use things like freemail accounts (Outlook, Gmail, Yahoo, etc.) in the “Reply To:” field in a message in when phishing. This is only visible to most users once they go to reply. If they are willing to spend a few dollars, they even register domain names very similar to the victim’s domain.
  • Use two-factor verification. Having a company policy where it’s acceptable to transfer $50k with a single email request is a bit loose with the coffers. It’s best for everyone if there is a second verification in place, such as a quick office visit or phone call. Same with sending around something like all employees W-2 files.
  • Hover over links in messages. Spear phishing attacks sometimes aim just a single email communication to get through to a user, with no back and forth requires. Such an attack might include providing a phishing link looking for an employee's email login, linking all the information to do a wire transfer for an external site, or even providing a link for an employee to upload sensitive company data. Knowing where you are going online by hovering, as well as glancing at, URLs once you are there is a common security tactic that some people need to follow more closely.
  • Don’t be afraid of your boss. Yeah, this can be a tough one. But some of these spear phishing emails rely on using the CEO name as a strong-arm to get an employee to do something. By writing the text in a way that sounds urgent or demanding, some employees may forgo any set policy and bypass procedures in place to please their boss. After all, they think the CEO is ordering them to. Obviously, questioning every order that comes down isn’t feasible or advisable, but, again, there are certain things like sending W-2s and wire transfers that should have set policies in place where everyone follows them no matter what. It’s better to question all wire transfers than to miss that one and send $20k to some foreign account.
  • Use an email filter. This may be obvious, but many email filters have advanced features and tests that can catch these sorts of attacks that people may not be aware of. At AppRiver, we have an advanced spear phishing test that can look for these types of low-key phishing email tactics and stop them. If you have a filter service that doesn’t have spear phishing features in it, you can even do something like block external email using your domain name in it: Any email using your domain name, but coming from somewhere that’s not your own server, gets blocked. Or you can enable SPF on your own domain and verify that on any incoming messages.

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