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ARTICLE · 09 AUGUST 2017

District Courts Buck Trend On Fidelity Coverage For Social Engineering And Business Email Compromise Schemes

The FBI continues to warn that losses are on the rise from business email compromise (BEC) or "social engineering" schemes, which the Bureau describes as:

United StatesLitigation, Mediation & Arbitration

The FBI continues to warn that losses are on the rise from business email compromise (BEC) or "social engineering" schemes, which the Bureau describes as:

Carried out by transnational criminal organizations that employ lawyers, linguists, hackers, and social engineers, BEC can take a variety of forms. But in just about every case, the scammers target employees with access to company finances and trick them into making wire transfers to bank accounts thought to belong to trusted partners—except the money ends up in accounts controlled by the criminals.

Just when it appeared that the circuit courts restored order to the question of coverage for losses arising from these schemes under fidelity policies, a couple of recent trial court decisions could result in a circuit-by-circuit patchwork of coverage law, depending on the outcome of appeals from those decisions.

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