Ransomware attacks have been surging the past few years and reached a headline-grabbing peak with the recent hijacking of computers in English hospitals, Chinese universities and countless businesses worldwide. This should be the last wake up call for companies, nonprofits and government agencies possessing sensitive, potentially valuable data.
In the world of cyber-espionage, ransomware is playing a huge and growing role.
Ransomware is aptly named: It’s essentially a way for hackers to hold your files hostage and seek a ransom to release them. A U.S. government interagency report describes it as “the fastest-growing malware threat, targeting users of all types – from the home user to the corporate network.”
The sheer volume of these attacks is staggering. The interagency report says there are thousands of them every day, and last year there was a 300 percent increase compared to the year before. Although the government often does not encourage paying the ransoms, studies have found that more than half of victims do.
Why Hackers Use Ransomware and Who They Go After
That’s an obvious first reason hackers are favoring this approach – it pays. The hackers rarely ask for astronomical amounts. Instead, they ask for an amount that many people would consider paying. The recent global attack asked for individual ransoms of $300 paid in bitcoin, for example. However, companies should work through their options and consult with law enforcement before making a payment. It can be a slippery slope, with the hackers then asking for more money.
...it’s a one-stop robbery – the hackers sell right back to who they stole from.
Another reason for ransomware’s increasing use is that, from a cyber-espionage standpoint, it’s relatively easy. Think about other kinds of robbers: After they steal something, there’s additional risk in figuring out how and where to sell their stolen goods. With ransomware, most of the time it’s a one-stop robbery – the hackers sell right back to who they stole from.
There are certain industries that are the biggest targets for this type of attack. The hackers know they can get the best returns on large pools of aggregated, sensitive data. For that reason, they often go after banks, hospital systems and law firms, to name a few.
The ransomware attacks started with what you’d think of as “big fish,” large companies that have the most data. But as those companies are implementing more sophisticated cybersecurity policies, hackers are going after smaller organizations too, including nonprofits. They sometimes see them as low-hanging fruit because the organizations may not have invested in the proper cybersecurity infrastructure.
How Organizations Can Protect Themselves
So what should a company do? The first step is simple: back up your data. That way, no matter what the hackers steal, you have another copy.
In addition, organizations should have detailed cybersecurity and data privacy policies that they regularly train their employees on. Many companies are developing protocols to warn staff about clicking on external links and attachments. Some also do test phishing to see if their employees need more training. There are a variety of compliance-related steps that can help protect your data or at least mitigate some of the damage a breach can cause. Counsel can help you craft policies that are catered to your needs.
In addition, it is essential that organizations understand their legal obligations before and after a breach. Those can vary by state and industry, so it’s important to have a firm grip on your requirements before anything happens. Once a breach does occur, there are legal obligations to navigate as your organization responds. In the health care industry, for example, notification of victims is required when their sensitive health information is taken.
There is also a growing number of lawsuits about these types of breaches, including class action lawsuits. Expect litigation on this to build as ransomware attacks continue.
I’ll give further analysis on this topic at Cyberhub Charlotte on Thursday, May 18. I’ll join a panel of other cybersecurity experts discussing how business leaders can understand and mitigate risks. If you attend, please say hello. Either way, don’t hesitate to contact me for legal assistance with your cybersecurity needs.
[A partner at law firm Parker Poe, Sarah Hutchins is a litigator with experience in commercial litigation and government investigation defense.]