A recent incident highlights a risk many businesses do not recognize until after customers are affected. A Calgary based organization experienced an email account compromise that resulted in malicious messages being sent to customers and vendors. The emails appeared legitimate, used real branding, and were delivered successfully from an enterprise-grade email system provided by Microsoft 365. The organization likely only became aware of the issue after recipients raised concerns.
No company names are shared. The intent is to explain how this type of incident works in practice and how it can be stopped before it reaches customers.
What Actually Happened
An internal email account was compromised. The attacker did not fake the sender or spoof the domain. They gained access to a real mailbox and sent messages directly from it.
The emails:
- Came from a valid internal address
- Passed standard email checks
- Used a document or invoice theme
- Directed recipients to click a link rather than open a real attachment
From the recipient’s perspective, the message looked normal. From a legacy or basic mail system’s perspective, it also looked normal.
That is the underlying issue.
What The Screenshots Reveal About The Attack
The screenshots show the full path a recipient would have taken after clicking the link.
First, the link was scanned by a large, well known email provider and marked as safe. That tells us the site did not immediately host malware and had not yet been widely reported. This allowed the message to pass automated checks without raising alarms.
Next, the recipient was taken to a page asking for their email address. For many users, this feels routine, as document portals often require an email address before granting access. The page used neutral language and did not immediately ask for a password, which reduced suspicion while confirming that the visitor was using a real account.
After that, a basic human verification step appeared. This filters out automated scanners and confirms the visitor is a real person.
Finally, the page attempted to move the user into what looked like a Microsoft sign-in experience. When a fake email address was entered (which we did for testing), Microsoft could not find an account. If a real address had been entered, the next step would likely have been a password prompt.
At that point, the attacker’s goal would have been met, and the customer or vendors account would have been potentially compromised.
The Point Of The Attack
The goal was not to deliver a document. The goal was to capture email credentials.
Once credentials are entered, an attacker gains access to the mailbox and can use that access to move laterally. In practice, this often means sending additional malicious email from another trusted account, targeting customers and vendors, and attempting to compromise more environments connected through normal business communication.
In some cases, the initial email compromise is only the first step. It can be used to escalate the attack into something more serious, including broader account takeovers, data access, or financial fraud. This type of attack relies on trust and timing rather than obvious malware, which is why it so often goes unnoticed until external parties raise concerns.
Why Traditional Email Controls Fail
Most email security controls are designed to inspect incoming messages. Their primary role is to stop external threats before they reach employees. They are not designed to closely examine messages being sent out by users who are already authenticated.
In this case, the email was sent from a real internal mailbox hosted on Microsoft 365, an enterprise-grade email platform used by millions of organizations. Once a user successfully signs in, Microsoft 365 assumes their activity is legitimate and focuses on delivering email reliably, not questioning every outbound message.
That creates a gap. If an internal Microsoft 365 account is compromised, outbound messages can leave the organization without the same level of scrutiny applied to inbound mail. Without a third-party security layer inspecting outbound behavior, malicious messages can be delivered to customers and partners before anyone is aware there is a problem.
By the time the issue is detected through a phone call or an email message, the emails have already been delivered and the reputational impact has already occurred.
The Real Risks Were Not The Email Itself
The email was only the delivery method. The real exposure came from what happened after recipients clicked the link.
Potential impacts included:
- Customers entering credentials into a fake sign-in page
- Access to additional mailboxes if credentials were reused
- Exposure of contact lists and business relationships
- Loss of trust when customers received malicious email from a known sender
Even when no data loss can be confirmed, reputational damage still occurs. Customers remember receiving the message, not the explanation that followed.
How Modern Mail Filtering Would Have Stopped This
Modern email security platforms do more than scan inbound messages. They monitor behavior, content, and context across the entire mail flow.
A properly configured mail filtering system from Lumitiv would have added several layers of protection.
Outbound message inspection
Outbound email inspection treats messages leaving the organization with the same level of scrutiny as messages coming in. Instead of assuming internal email is safe, the system evaluates outgoing messages as potential risk events.
This matters because a compromised mailbox does not behave like a normal user. The content, structure, and destination of those messages often change in subtle but detectable ways. Outbound inspection looks for those signals before the email is allowed to leave the organization.
- Phishing language patterns
- Malicious or newly registered links
- Fake document-sharing templates
- Credential harvesting indicators
When these indicators appear, the message can be blocked or quarantined automatically. In this case, the invoice email would likely have been stopped before it ever reached customers or partners, preventing the incident from escalating beyond the organization.
Damage containment instead of damage response
When outbound email is not monitored, compromises are usually discovered by accident. The first sign is rarely a system alert. It is more often a reaction from a person.
Common early warning signals include:
- A customer calling to ask if an email is legitimate
- A vendor forwarding the message internally with a question
- An employee noticing an unexpected reply from an external contact
- A user reporting that someone received a strange message from them
- An apology email sent after the damage is already done
By the time any of these occur, the email has already been delivered and trust has already been affected.
With outbound protection in place, the sequence changes. Instead of reacting to external reports, the system intervenes automatically.
- Malicious messages are stopped before delivery
- The compromised account is flagged early
- Administrators investigate while the incident is contained
- Customers and partners are never exposed to the attack
One approach cleans up after a problem. The other prevents the problem from becoming visible in the first place.
Why This Matters Even For Small Organizations
Many businesses assume they are too small to be targeted. That assumption is incorrect. Attackers do not choose targets based on size. They choose targets based on opportunity. Any mailbox with weak protection is a viable entry point.
Once compromised, that mailbox becomes a trusted delivery channel to customers, partners, and suppliers. The business may not lose data. It may not lose money directly. It may still lose credibility.
The Practical Lesson
Organizations that are not using modern email protection platforms are exposed to this type of attack. It is not a theoretical risk. It is an operational gap that attackers actively take advantage of.
Email security is no longer limited to blocking spam or obvious threats. It plays a direct role in preventing an organization from unintentionally harming customers, partners, and suppliers.
Systems that only inspect incoming email leave a critical blind spot. Legacy mail platforms cannot see or stop attacks that originate from inside a compromised mailbox. Without outbound inspection, malicious messages are allowed to leave the organization unchecked.
This incident did not require advanced tools or sophisticated techniques. It was preventable. The controls needed to stop it already exist. The only question is whether they are in place before an incident occurs, or added afterward in response to damage that has already been done.
Why This Protection Is a Baseline Requirement
Outbound email compromise is a serious breach vector. When it is left unaddressed, it allows attackers to use a legitimate business as the delivery mechanism for fraud, credential theft, and further compromise.
For that reason, Lumitiv requires all managed clients to have modern email protection in place. This is not treated as an optional add-on or a future improvement. It is a baseline control that we include in all our support packages.
This type of protection is inexpensive, fast to deploy, and integrates cleanly with existing email platforms. There is no practical reason for any organization, including a small startup, to operate a production email system without it.
The objective is not just to block bad messages. It is to prevent:
- Customers from being exposed to malicious content
- Damage to brand reputation
- Reactive explanations after an incident
- Loss of trust that is difficult to rebuild
The best outcome is the malicious email is never delivered, and the apology message never needs to be sent.