This browser does not support the Video element.
Avoiding emails scams: How four letters nearly doomed a Livonia business
Larry Stock's business saw a huge opportunity with a known client -- but a scammer also saw an opportunity and nearly stole $82,000.
LIVONIA, Mich. (FOX 2) - In Stock Marketing has been in business in Livonia for a while and, while they're no strangers to scams and hacks, what owner Larry Stock encountered recently nearly have cost him his business.
Stock's company stitches and embroiders thousands of shirts at the Livonia shop. But a hacker who weaved their way into an email thread between Stock and his vendor. Suddenly, Stock's future was murky, at best.
How the scam worked
The scam is a warning to anyone who conducts business by email. The scammer was able to insert himself between Stock and the vendor.
"We had $82,000 worth of goods sitting on a dock waiting to be shipped out, they were just waiting for the money," Stock said.
He was trying to send the money to who he thought was a legitimate vendor.
"They knew exactly what to say to me," Stock said. "One of our clients wanted to do t-shirts and hoodies for all of their employees and there are 6,500 employees."
The order of this size requires Stock to outsource it. He reached out to a company to send them money in advance.
"So I emailed back to them and this is where it happened. Right in the middle of a live chain of emails," Stock said.
As he's exchanging emails with a rep named Kathy, a Kathy impersonator infiltrated the conversation.
"Everything is the same: signatures, logos, titles. The only thing they changed was in the url. It was company-corp.com. Instead of company.com," Stock said.
Those five characters nearly cost Stock everything. Before he could put together what was happening, someone claiming to be the Chief Financial Officer asked to re-wire the money – which he did. But he sent it right where the impostor wanted it.
A business on the brink
"The actual company calls me and says Larry when are you going to wire the money? I said I’ve been talking with you all day. She says no you haven’t – you didn’t talk to me. I said I even spoke with your CFO today and she says, ‘why would you talk to our CFO? He doesn’t get involved in anything.' So then the color is draining out of my face. I said I gotta go, I gotta make some calls," Stock said.
Now that Stock knows he's been scammed, he calls the bank. But the transfer has already gone through. That $82,000 is now his responsibility.
"I have 5 employees here that are going to be out of work," Stock said.
He called police who started an investigation – and is told to call the scammer directly and pretend to add on to the order.
"We think one of the officer’s radio crackled in the background and it might have given it away. We are not sure, but he just went dark after that," Stock said.
He's told he's going to have to wait until the next day to see if they stopped the transfer. It was the longest night of his life.
"I come in the next morning. Im white as a ghost still, no sleep, dark circles, worried about what I'm going to tell everybody," Stock said.
The failed scam
When the bank calls, it was the news Stock had been hoping for.
"She goes, guess what. I got your money back. All of a sudden, the color comes back," he said.
Why the scam failed is hard to say, exactly, but Stock and his company have learned a valuable lesson.
"This just doesn’t happen. Usually when there is a scam wire transfer there is someone waiting on the other end and when that bell dings, it’s gone," Stock said.
How to protect yourself from scams
Cyber security expert David Derigiotis says the number one thing to do in this case is change your password.
In his experience, the scammers have somehow got access to the victim's email and are laying in wait for an opportunity like this to strike.
The Source: FOX 2's Dave Spencer spoke with Larry Stock and David Derigiotis for this story.