Ransomware Attacks Continue Unabated in the Era of COVID

On June 9, the Beazley Group, a specialty insurer affiliated with Lloyd’s Underwriters, issued a pointed reminder that, as we continue to fight the global pandemic of COVID-19, the cyber pandemic of ransomware continues.

According to Beazley’s Breach Response Services group, ransomware incidents in the first quarter of 2020 increased by 25% compared to Q4 2019. While no industry was immune, the manufacturing sector saw a startling increase of 156% quarter over quarter.

Many of these breaches began with service providers and vendors – with financial services and health care provider sectors also being vulnerable to ransomware attacks. This should serve as a reminder that vetting of vendors’ cyber security measures can be as important as a company’s internal security protocols.

Beazley’s report further notes an acceleration in reports of phishing incidents seeking to prey on a frightened populace during this time of global pandemic. Research from security awareness training company KnowBe4 has identified a broad range of COVID-19-related scams including social media posts, smishing (text message phishing) and email phishing. Cybercriminals are known to seek to take advantage of political or social instability, and the pandemic has created a landscape ripe with opportunities to exploit people’s insecurities and uncertainties.

KnowBe4 specifically highlighted scams relating to COVID testing and, to a greater degree, scams related to COVID financial relief. The typical scam offers assistance in obtaining loans or direct relief payments, which leads to a request for bank account or other personal information. The scam email asks recipients to download a file that will implant ransomware into the victim’s computer or network. Given the current economic pressure facing many companies and individuals, it is unsurprising that these scams have been so successful. Companies’ current reliance on remote operations increases the likelihood that there will be a spike in the number of companies paying to have ransomware removed from their systems to avoid a network shutdown. Atlas VPN, a leading provider, indicated that even before the pandemic outbreak, the amounts of demanded ransom payments increased by 140% from 2018 to 2019, while the number of organizations succumbing to blackmail increased by 57% in the same time period.

This information should serve as stark reminder to all companies that, in these uncertain times, the need for increased cybersecurity vigilance cannot be understated. Every company should be working with their counsel and consultants to ensure that they are taking proper care, including employee training and systems reviews, to protect their network security.