This happened to us. We are a general contractor.
We got an invoice from one of our typical clients, a progress payment type thing on an active job, and we wired it.
Turned out it was not a real email so the money did not go to our client.

I don't know for sure how it ended, luckily it wasn't like the whole project amount or anything.

fka ftc said:

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Premium said:

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fka ftc said:

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Premium said:

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Embarrassingly to say, we had an employee get hacked and as credit manager the back and forth ended with the customer sending $170K+ in payment to a fraudulent bank account.

What happened is they just never paid their invoice and dumped it on us.

Does anyone have any experience on taking this to court, is it worth our time and money to go after?

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Depends on the circumstance and how was ultimately "at fault". You customer made the determination they had zero fault in this. I would find that hard to believe unless it was your employee that made the error or committed the fraud.

If you warned the customer not to wire to that account, or they made an error on their end, or if in fact they had an employee committing a fraud, then that is on the customer and you would likely prevail.

If this was within the last couple of years, talk to your general counsel or business attorney.

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In our circumstance our employee was definitely hacked. Scammer set up email rules to siphon off all back and forth email so only the scammer was able to see and communicate with the customer.

The customer only communicated by email and did not attempt to verify new banking instructions by calling us.

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IANAL, but I am thinking you would not be successful going after the customer. Did you look into insurance coverage? $170k is a decent amount of money.

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We didn't have cyber insurance coverage but need to get it.

I'm not sure legal is worth it, I'm on the fence - the lawyers are saying a good $20K to make the first go / threats - and if that didn't work and we decided to take it beyond that the total could be in the $80K range to go all the way.

Premium said:

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We didn't have cyber insurance coverage but need to get it.

I'm not sure legal is worth it, I'm on the fence - the lawyers are saying a good $20K to make the first go / threats - and if that didn't work and we decided to take it beyond that the total could be in the $80K range to go all the way.

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It's been awhile since I sat in on our insurance renewals, but check with your broker on how they classify theft vs cyber security if you have not already.

Based on what you described, legal case not worth it as the fault seems to be within your company, though your customer sounds like maybe they should not be a customer you want to do business with.

Just my opinion based on business experience.

Fraudsters suck. Gullible employees also suck, but not as bad as fraudsters.

Premium said:

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fka ftc said:

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Premium said:

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fka ftc said:

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Premium said:

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Embarrassingly to say, we had an employee get hacked and as credit manager the back and forth ended with the customer sending $170K+ in payment to a fraudulent bank account.

What happened is they just never paid their invoice and dumped it on us.

Does anyone have any experience on taking this to court, is it worth our time and money to go after?

---

Depends on the circumstance and how was ultimately "at fault". You customer made the determination they had zero fault in this. I would find that hard to believe unless it was your employee that made the error or committed the fraud.

If you warned the customer not to wire to that account, or they made an error on their end, or if in fact they had an employee committing a fraud, then that is on the customer and you would likely prevail.

If this was within the last couple of years, talk to your general counsel or business attorney.

---

In our circumstance our employee was definitely hacked. Scammer set up email rules to siphon off all back and forth email so only the scammer was able to see and communicate with the customer.

The customer only communicated by email and did not attempt to verify new banking instructions by calling us.

---

IANAL, but I am thinking you would not be successful going after the customer. Did you look into insurance coverage? $170k is a decent amount of money.

---

We didn't have cyber insurance coverage but need to get it.

I'm not sure legal is worth it, I'm on the fence - the lawyers are saying a good $20K to make the first go / threats - and if that didn't work and we decided to take it beyond that the total could be in the $80K range to go all the way.

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100% your customer still owes you the money.

Sorry to the OP but when these wires are sent it is ON THE SENDER, not the receiver.

People don't want to pay bank fees or proper employees etc and shop for the lowest bidder and least friction when doing transactions. Then realize what it actually takes to securely conduct electronic payments and no going back to check is not the answer.

SF2004 said:

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Premium said:

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fka ftc said:

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Premium said:

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fka ftc said:

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Premium said:

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Embarrassingly to say, we had an employee get hacked and as credit manager the back and forth ended with the customer sending $170K+ in payment to a fraudulent bank account.

What happened is they just never paid their invoice and dumped it on us.

Does anyone have any experience on taking this to court, is it worth our time and money to go after?

---

Depends on the circumstance and how was ultimately "at fault". You customer made the determination they had zero fault in this. I would find that hard to believe unless it was your employee that made the error or committed the fraud.

If you warned the customer not to wire to that account, or they made an error on their end, or if in fact they had an employee committing a fraud, then that is on the customer and you would likely prevail.

If this was within the last couple of years, talk to your general counsel or business attorney.

---

In our circumstance our employee was definitely hacked. Scammer set up email rules to siphon off all back and forth email so only the scammer was able to see and communicate with the customer.

The customer only communicated by email and did not attempt to verify new banking instructions by calling us.

---

IANAL, but I am thinking you would not be successful going after the customer. Did you look into insurance coverage? $170k is a decent amount of money.

---

We didn't have cyber insurance coverage but need to get it.

I'm not sure legal is worth it, I'm on the fence - the lawyers are saying a good $20K to make the first go / threats - and if that didn't work and we decided to take it beyond that the total could be in the $80K range to go all the way.

---

100% your customer still owes you the money.

Sorry to the OP but when these wires are sent it is ON THE SENDER, not the receiver.

People don't want to pay bank fees or proper employees etc and shop for the lowest bidder and least friction when doing transactions. Then realize what it actually takes to securely conduct electronic payments and no going back to check is not the answer.

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Our lawyers like our case. Would you go forward with the lawsuit with the risk v reward here? I don't think our lawyer fees would be recoverable. So risk $20K for $170K at minimum and potentially risk $80K if it comes to that.

They are no longer a customer since this happened.

Premium said:

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SF2004 said:

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Premium said:

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fka ftc said:

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Premium said:

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fka ftc said:

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Premium said:

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Embarrassingly to say, we had an employee get hacked and as credit manager the back and forth ended with the customer sending $170K+ in payment to a fraudulent bank account.

What happened is they just never paid their invoice and dumped it on us.

Does anyone have any experience on taking this to court, is it worth our time and money to go after?

---

Depends on the circumstance and how was ultimately "at fault". You customer made the determination they had zero fault in this. I would find that hard to believe unless it was your employee that made the error or committed the fraud.

If you warned the customer not to wire to that account, or they made an error on their end, or if in fact they had an employee committing a fraud, then that is on the customer and you would likely prevail.

If this was within the last couple of years, talk to your general counsel or business attorney.

---

In our circumstance our employee was definitely hacked. Scammer set up email rules to siphon off all back and forth email so only the scammer was able to see and communicate with the customer.

The customer only communicated by email and did not attempt to verify new banking instructions by calling us.

---

IANAL, but I am thinking you would not be successful going after the customer. Did you look into insurance coverage? $170k is a decent amount of money.

---

We didn't have cyber insurance coverage but need to get it.

I'm not sure legal is worth it, I'm on the fence - the lawyers are saying a good $20K to make the first go / threats - and if that didn't work and we decided to take it beyond that the total could be in the $80K range to go all the way.

---

100% your customer still owes you the money.

Sorry to the OP but when these wires are sent it is ON THE SENDER, not the receiver.

People don't want to pay bank fees or proper employees etc and shop for the lowest bidder and least friction when doing transactions. Then realize what it actually takes to securely conduct electronic payments and no going back to check is not the answer.

---

Our lawyers like our case. Would you go forward with the lawsuit with the risk v reward here? I don't think our lawyer fees would be recoverable. So risk $20K for $170K at minimum and potentially risk $80K if it comes to that.

They are no longer a customer since this happened.

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IANAL

Whether is worth it or not is up to you.