A form of social engineering, spear phishing is a malicious email that impersonates an individual for the purpose of tricking a recipient into completing a desired action—typically financial in nature. Often, a hacker will impersonate a victim’s acquaintances, such as colleagues, executives, clients, or vendors.
Spear phishing cost US businesses $1.7 billion in 2019
– FBI Internet Crime Report 2019
To trick recipients into thinking they’re reading an email from a trusted sender, spear phishers use a technique called “spoofing” that allows them to impersonate a legitimate sender and email address. There are three primary methods of email spoofing:
Display name spoofing impersonates the sender’s name but not the email address. This is effective because many users will trust the sender immediately upon seeing the name. It’s also effective because many email clients, especially on mobile, show only the sender’s name but not the email address.
This method is more sophisticated than display name spoofing but also easier to detect by SPF (Secure Policy Framework), DMARC (Domain Message Authentication Reporting), and DKIM (Domain Keys Identified Email). With domain spoofing, a spear phisher can specify the email address they want to spoof. When an email address is an exact replica of a trusted sender, users are unlikely to recognize that the email is spoofed.
A close cousin email address is nearly identical to a legitimate one, with only a slight modification. In the past, close cousin spoofing attempts were more obvious, such as mIcrosoft.com instead of microsoft.com. Today, attempts are more advanced and difficult to spot, such as firstname.lastname@example.org instead of email@example.com. These subtle changes can be extremely difficult to spot for busy staff who quickly read and respond to emails, especially when they are urgent in nature. Moreover, DMARC and SPF are ineffective against close cousins because they only protect exact domains.
There are no shortage of ways to trick people into giving up sensitive data and credentials. However, there are some well-honed attacks that spear phishers turn to time and again.
Posing as an executive, a hacker asks an employee to purchase multiple gift cards and send them the codes on the back of the cards. Often, the hacker will say that they’re in a meeting or away from their office. This adds to the believability of an executive writing an email from a personal email address, such as Gmail or Yahoo.
In one version of this scam, a hacker posing as an employee sends an email to an HR assistant, requesting to change their bank account for their payroll direct deposit. In another version, a hacker posing as a vendor emails a staff member in accounting, informing them that the company’s bank account and routing number has changed, and future payments should be sent to the new account.
A spear phisher posing as an executive emails a staff member in the HR department, requesting employee W-2s, a US tax form reflecting employee earnings and tax deductions. Tax time is particularly stressful for accounting and HR departments, and the pressure, in addition to the time constraints, makes them vulnerable to making the mistake of falling for this type of attack.
Also known as business email compromise (BEC), this spear phishing variant is one of the most costly. A hacker posing as a top executive makes a request for funds in the form of a wire transfer. In many high-profile cases, businesses were completely unaware that millions of dollars had been sent to fraudulent bank accounts.
A common method for hacking into Microsoft 365, multiphase attacks begin with phishing and evolve into spear phishing. A hacker sends a phishing email to an employee, impersonating Microsoft. The victim unknowingly gives up their Microsoft 365 login credentials on a phishing page. Armed with the victim’s username and password, the hacker enters the business’s Office 365 ecosystem where they launch spear phishing attacks using legitimate Microsoft 365 email addresses.
There were more than 23,000 US victims of business email compromise in 2019
A one-off, text-only spear phishing email might look unsophisticated on the surface, but there are social engineering techniques at work that reveal a sophisticated level of psychological manipulation. Below are some examples:
Engaging in pretexting: Spear phishers prime their victims by first sending a friendly email and engaging in small talk, such as “how was your vacation?” or “congrats on the promotion.” This lowers the victim’s guard, prepping them for the spear phisher’s eventual request, which might not come for several more emails.
Making urgent requests: Often, spear phishers will convince their victims that they have only hours—or even minutes—to send a wire transfer, change their bank account information, or purchase gift cards for clients.
Sending emails via mobile: Spear phishers posing as executives often claim to be out of the office, even out of the country, and urgently need the victim’s help. Adding “sent from my iPad, iPhone, or Android device” adds to the believability of such a claim and also excuses mistakes in the email, such as typos. It also creates an excuse for using a non-corporate email address like Gmail.
The absence of URLs and attachments makes spear phishing extremely difficult to detect. Traditional email filters use outdated methods to block threats, and most are ineffective in the fight against spear phishing. Optimal spear phishing protection requires advanced methods.
Traditional Email Defense
Native Microsoft 365 email security has a total accuracy rating of only 8%
– SE Labs
With predictive defense, artificial intelligence (AI), including a combination of supervised and unsupervised machine learning models, work together to identify the telltale and difficult-to-detect signs of spear phishing:
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