What You Need to Know About Cyber Extortion

Originally published by Veeam Software.

Written by Javier Perez, Sr. Director of Product Marketing for Security at Veeam Software.

Cyber extortion is no longer just a headline —it's a daily challenge for organizations. Protecting your organization requires more than just defenses; it’s about being ready to respond swiftly and resiliently to emerging threats. In this article, I’ll explore cyber extortion tactics, the methods cybercriminals use and offer recommendations to help your organization stay ahead and effectively handle these risks.

What is Cyber Extortion?

Cyber extortion is a form of cybercrime where attackers compromise an organization’s systems, data, or networks and demand a ransom to return to normal and prevent further damage. Beyond a ransomware attack, where data is encrypted and held hostage until the ransom is paid, cyber extortion can involve other threats and tactics such as:

Data exfiltration: Attackers steal sensitive data and threaten to publish or sell it unless a ransom is paid. The release of this data can lead to severe legal liabilities, loss of customer trust, and long-term reputational damage.

Ransomware with additional extortion: Beyond just encrypting data, some attackers use “double extortion” tactics — demanding a ransom not only for decrypting the data but also for not publicly disclosing it.

Insider threats: Insider threats involve employees or contractors who have access to sensitive information and use it to extort the organization. These individuals may threaten to leak or destroy data unless their demands are met. Insider threats are particularly challenging to detect and prevent, as they involve individuals with legitimate access to the organization’s systems and data.

Protests or “Protestware”: Is a type of cyber extortion where attackers use cyber tactics, such as data theft or service disruption, to push for political or social changes rather than purely financial gain. While still demanding a ransom or concessions, these threats are often ideologically driven.

Other cyber extortion cases include threatening to release compromising images or videos unless a ransom is paid.

The Growing Threat of Cyber Extortion

As digital transformation accelerates, cyber extortion has become a growing concern for organizations of all sizes. Cybercriminals are no longer just targeting large enterprises; they’re shifting focus to smaller and mid-sized organizations, knowing that these companies often lack the extensive security resources needed to defend against sophisticated attacks. This trend has been further fueled by the rapid shift to remote work, which has exposed new vulnerabilities and made many organizations more susceptible to cyber threats.

The following data illustrates this shift, showing how ransomware and other forms of cyber extortion have increasingly impacted businesses across various sectors and sizes. Understanding these trends is crucial to adapting your cybersecurity strategies and staying ahead of potential threats.

Source: Ransomware actors pivot away from major brands in Q2 2024 (coveware.com)

The Impact of Cyber Extortion on Organizations

Cyber extortion can have far-reaching consequences for organizations, affecting not only their financial health but also their reputation and operational capabilities. The impact of such attacks includes:

Financial losses: The immediate financial impact of cyber extortion includes the potential ransom payment, costs associated with business disruption, and expenses related to restoring systems and data. In some cases, sales are disrupted, creating significant financial losses. Additionally, organizations may face increased costs for cyber insurance premiums and regulatory fines if they fail to protect sensitive data adequately.

Business disruption: Cyber extortion attacks can severely disrupt business operations, particularly if critical systems are compromised or taken offline. This disruption can result in lost revenue, especially for businesses that rely on continuous access to digital services or data, for example, dispatching, scheduling, or delivery of services. If bills cannot be paid or jobs cannot be dispatched the damage extends to users and customers.

Reputational damage: The public disclosure of a cyber extortion incident can lead to a loss of trust among customers, partners, and stakeholders. The damage to an organization’s reputation can have long-term consequences, including lost business opportunities and a decline in customer loyalty. In industries where trust is paramount, such as finance or healthcare, reputational damage can be particularly devastating.

Legal and regulatory consequences: Depending on the nature of the data compromised and the industry, organizations may face regulatory fines for failing to protect sensitive information. Legal costs can also mount as companies navigate the aftermath of an attack, including potential lawsuits from affected customers or partners. Compliance with data protection regulations is critical to minimizing these risks.

How to Respond to a Cyber Extortion Attack

Despite the best preventive measures, cyber extortion attacks can still occur. When they do, a swift and coordinated response is crucial to minimizing the damage. Here are the key steps to take if your organization becomes a victim of cyber extortion:

Stay calm and follow your incident response plan: Panic can lead to poor decision-making, which can exacerbate the situation. It’s essential to stay calm and follow your incident response plan methodically. This plan should guide your organization through the steps needed to contain the attack, mitigate the damage, and begin the recovery process.

Isolate affected systems: The first step in containing a cyber extortion attack is to isolate the affected systems from the rest of the network. This prevents the attack from spreading and causing further damage. Disconnect compromised systems from the network and restrict access to critical data. If the attack involves a DDoS, work with your internet service provider (ISP) to mitigate the traffic.

Engage cybersecurity experts: Cybersecurity experts with experience in incident response can provide invaluable assistance during a cyber extortion attack. They can help assess the situation, determine the attackers’ methods and motives, and recommend the best course of action. Involving experts early in the response process can help minimize the damage and speed up recovery.

Assess the impact of the attack: Understanding the full scope of the attack is essential for effective recovery. Assess the damage to your systems and data and determine which systems have been- compromised and whether any backups remain unaffected. This evaluation will guide your recovery efforts and help prioritize the most critical tasks.

Communicate with stakeholders transparently: Keeping stakeholders informed about the situation is vital. This includes executives, legal teams, and communication teams, who need to coordinate their efforts to manage the incident effectively. If the attack is likely to become public, it’s essential to have a communication strategy in place to address customer and media inquiries.

Notify authorities and regulatory bodies: Reporting the attack to law enforcement and relevant regulatory bodies is a crucial step in the response process. Authorities may provide assistance or guidance on how to handle the situation, and timely reporting ensures compliance with legal requirements, avoiding further penalties.

Conduct a post-incident review: After the immediate crisis is resolved, it’s important to conduct a thorough review of the incident. This review should identify how the attack occurred, assess the effectiveness of your incident response plan, and highlight any gaps in your security infrastructure. The lessons learned from this review should inform future security strategies and updates to your incident response plan.

Manage public relations and customer communication: If the attack becomes public knowledge, managing your organization’s reputation is critical. Prepare a well-crafted public statement to address any concerns from customers, partners, and stakeholders. Transparency is key; acknowledge the issue, outline the steps taken to resolve it, and highlight measures being implemented to prevent future incidents.

Enhance security measures post-attack: The aftermath of a cyber extortion attack provides an opportunity to strengthen your organization’s cybersecurity defenses. Based on the findings from your post-incident review, implement additional security measures, update existing protocols, and ensure that your organization is better prepared for any future threats.

Final Thoughts

Cyber extortion is a constant threat, but it doesn’t have to control your organization’s future. By adopting a well-rounded strategy, utilizing the right tools, and forming strong partnerships, you can turn these challenges into opportunities to strengthen your security. When an incident occurs, it’s critical to be prepared: follow a robust incident response plan, seek expert assistance, and ensure your data recovery processes have been thoroughly tested and are ready to deploy when needed.

---

About the Author

Javier boasts an extensive career spanning 28 years, showcasing his expertise in a spectrum of technological domains, including application development, open source software, mobile technologies, app security, SaaS, and AI. As a Sr. Director of Product Marketing for Security at Veeam Software, Javier is responsible for driving technical thought leadership while also leading product marketing initiatives for cybersecurity and data resilience.

Prior to his current role, Javier held Chief Evangelist and leadership roles at startups and renowned technology companies, such as Perforce, IBM, and Red Hat. Javier actively engages as a speaker and prolific blogger, sharing his knowledge and insights across the global tech community. Armed with an honors degree in Computer Systems and an MBA, Javier aims to inspire others through his thought leadership and advocacy, fostering a culture that embraces cybersecurity and open source to drive innovation.