Rise in Cyber Data Kidnapping: Tips on Protecting Your Data From Being Taken Hostage


As many predicted, cybercriminals continue to increase their targeting of  middle-market businesses.   These criminals presume - often correctly so - that a small business will have less robust defenses than a Fortune 500 company that has invested millions of dollars in cyber-perimeter and infrastructure security.

A recent article posted on the Bloomberg Tech Blog, (please click here to read article), illustrates this point and explains a new twist hackers are putting on the typical data breach/cybertheft: the virtual equivalent of the  “kidnap and ransom” of medical records and other sensitive data.

As the Bloomberg article points out, large scale extortion by cyberhackers is not new;  however, the shotgun approach to deploying cyberthreats to smaller targets is an evolving grassroots criminal tactic small and middle-size businesses must not ignore.     

We wrote previously about a company that was forced into bankruptcy as a result of a “traditional” data breach, which can be read here. These non-traditional extortion efforts could bring about similar results.    We strongly encourage our clients to revisit these areas of their operations on a regular basis: 

Prevention:   Conduct a security and privacy assessment of vulnerabilities and risks.  We provide clients with a confidential and privileged work-product to assist in addressing security gaps and decrease likelihood of loss of sensitive data.   We also can provide counsel on your non-technical (e.g., personnel and financial) risks that may also create parallel areas of exposure.

Risk Transfer:   Review contracts and agreements with third-party vendors or processors of data to decrease risk. We also help clients explore relevant insurance coverage (expanding on Cybersecurity and other new insurance policy endorsements) and mitigate inherent risk.

Post-Breach Response:  If your company is the victim of a cyber-attack, it’s critical to enact an effective and thorough response.  We can guide investigations of suspected data breaches and act as an experienced liaison and advocate with law enforcement and regulatory officials, and ensure that all regulatory requirements are met, harm to third parties is mitigated and that facts are memorialized to defend against possible future litigation.

Public Relations/Brand Management:  In a crisis situation, it’s important to manage media messaging and address any public relations issues that may affect your brand. We have helped clients select professional crisis management PR firm and provide counsel regarding the legal impact of various message strategies.  and can also assist in obtaining payment from their insurance companies for these expenses.

In the event of a cyber “kidnapping” we have access to a global network of experienced investigative and other resources that can assist in fact-finding and risk mitigation.   We also have strong relationships with local/state/federal law enforcement and are familiar with the types of regulatory inquiries that may follow from such an event.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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