The traditional philosophy of never negotiating with extortionists has had to adapt to the realities of cybercrime – if you don’t pay, your data may be lost forever
The prevailing wisdom in law enforcement has been that it
is a bad idea to negotiate with extortionists. Cave to their demands and all
you’re doing is encouraging more extortion. And you don’t even have a guarantee
that paying a ransom will produce the return of your loved one unharmed, or
your stolen assets.
Better to refuse the demands, find the criminals and
punish them in a way that will discourage them and others from doing the same
thing.
But, in the digital world, where criminals encrypt data
and then demand a ransom to provide the key, that prevailing wisdom is getting
a forcible adjustment.
The first reality is that, much of the time, cyber
extortionists are far beyond the reach of domestic law enforcement. Second,
most of them actually make good on unlocking the data once the ransom has been
paid, because they want future victims to pay up as well.
In some cases, it is law enforcement itself that is paying the ransoms. The Boston Globe reported recently that the police department in Tewksbury, a Boston suburb, had paid a $500 ransom to criminals who had encrypted data including arrest and incident records.
“(S)pecialists from federal and state law enforcement
agencies – plus two private Internet security firms – could not unscramble the
corrupted files,” the paper reported.
There have been similar stories in police departments
near Chicago, in Tennessee, New Hampshire and Alabama.
In short, this is a growth industry. Most thieves have
learned that if they keep the ransom relatively low – a few hundred dollars –
and get a reputation for providing the encryption key once the ransom has been
paid, those few hundred dollars per victim can add up to thousands per month.
Val Saengphaibul, security response manager at Symantec,
said his firm knows of one cyber gang that makes, “at least $35,000 a month.
Other cyber-gangs have taken note and there are quite a few of them running
this scam,” he said, noting that, “payment is not easily traced or stopped, and
targeting specific data files that are valuable to people and organizations
increases the likelihood of payment.”
Indeed, a recent survey by ThreatTrack Security found that 30% of the security professionals who responded said they would negotiate with the extortionists. And that percentage rose to 55% among organizations that have already fallen victim to cyber-extortionists.
Some of that was conditional. When asked if organizations should set aside funds for paying ransoms to recover their data, 45% gave a conditional “yes,” but nearly half of them said it would “depend on the data.” The most important, in their view, were employee Social Security numbers, addresses and salaries.”
Stuart Itkin, ThreatTrack’s senior vice president, said
there is obviously no guarantee that criminals will unlock the encrypted data,
but that it is in their, “best interest to keep their word so victims succumb
and they continue making money by infecting more people.”
He said ransomware developers have even, “created
safeguards to ensure their malware doesn’t infect the same victims again after
they’ve paid a ransom.”
Jody Westby, CEO of Global Cyber Risk, also said in her
experience, cyber extortionists have kept their side of the deal. She said for
most of her clients, it comes down to a business decision.
“I have seen IT guys say, ‘No way, we aren't negotiating
or paying a dime,’” she said. “But then the CFO or another C-suite executive
gets involved, evaluates the amount of money requested, and says it is a
no-brainer: They are going to pay and keep the business running. It would cost
more to have the system down.”
Of course, not all extortionists are so “honorable”.
According to Saengphaibul, “if you look hard enough, you’ll find numerous
victims experiences showing hackers not upholding their end of the deal by not
unlocking computers after ransom is paid.”
Saengphaibul said Symantec sticks with the more
traditional law enforcement philosophy – don’t pay up.
“Paying the ransom just further promotes this illegal
activity,” he said. “It’s unlikely that victims will get their files back
anyway, so don’t put money in the criminals’ pockets. If we deny the criminals profit, then there
is no point in running the scam. They move on.”
He said if extortion targets have regularly backed up
their files, they can’t be victimized in the first place. “When there is no
demand on the underground economy for ransomware attack services, hackers will
ultimately be out of business,” he said.
But, particularly for businesses, it is not always as
simple as having backup files.
“Everyone should have backups,” Westby said. “But that is
not the issue. The issue is having the data disclosed. They pay to get it back
so it won't be disclosed.”
She said if a company refuses to pay the demanded ransom,
extortionists can start making it public. “They can start disclosing data in
pieces, or send some of the most damaging to the press, they can sell the data
on the black market or to a competitor company,” she said.
“The damage is to reputation, loss of market share, loss
of customer and pricing data or other strategic business data that could have a
real impact on the bottom line.”
Itkin agrees. “Data breach headlines, lawsuits, eroded
customer trust and other collateral damage a breach can cause gives
(extortionists) tremendous leverage,” he said.
“All you have to do is look at the fallout from the Sony breach. First, the extortionists succeeded in manipulating Sony’s release of a major motion picture, which had financial consequences for not just Sony, but the theaters that planned to screen it, among others. Second, their data was perfect for wide-spread media appeal – dripping with Hollywood gossip.”
That means, while data backups ought to be regular and automatic, they are not enough. Rigorous, end-to-end encryption ought to be mandatory as well, since it can make most stolen data useless to extortionists.
With stolen encrypted data, “criminals don't even know what they have to ask ransom for it,” Westby said, adding that, “cyber extortion insurance also is good, because we are in a new era of cybercrime.”
But beyond backups and encryption, experts including Saengphaibul say that, “security is multilayered and requires an encompassing approach – endpoint security, employee training, system updates, etc.”
Security, he said, should include not just traditional anti-virus, but also, “download protection, browser protection, heuristic technologies, firewall and a community sourced file reputation scoring system.”
And when it comes to negotiation, Itkin said security pros should, “always be aware that cybercriminals’ No. 1 priority is making money, not keeping their word.”
**This story, "Cyber extortion: A growth industry" was originally published by CSO.