1-888-643-2217 Email ABEX
Keeping you updated

Category Archives: Cyber Risk Management

City Government Falls Victim to Social Engineering

Social engineering involves the use of deception to manipulate individuals into carrying out a particular act, such as transferring money, handing over confidential information, or clicking on a malicious link, and it’s causing serious financial harm to organizations around the world.

Any organization that transfers funds electronically can be susceptible to social engineering attacks, and entities operating in the public sector are no exception to this. Public entities not only receive funds electronically in the form of grants from central government and tax receipts from local residents, but they also disburse large amounts of money both internally to different departments and externally to third party suppliers and contractors. All these transactions make for a tempting target for cybercriminals, who are constantly on the lookout for opportunities to intercept fund transfers and divert them to fraudulent accounts.One of our policyholders affected by such a loss was a local government for a city with a population of around 140,000. The city government’s responsibilities include public transportation, car parking facilities, social housing, parks and recreation areas, and recycling and waste disposal, and more.

Fraudster glimpses prime opportunity

The scam all began when an employee from the city’s finance department fell for a credential phishing email. Credential phishing emails are used by malicious actors to try and trick individuals into voluntarily handing over their login details, typically by directing them through to a fake login page.

In this case, the employee received an email purporting to be from Microsoft. The email explained that the employee’s email account details needed to be verified in order for them to continue to use Outlook without disruption. With the email appearing to come from an official source and with the employee not wanting to suffer any disruption to her work, she clicked on the link included in the email. The link took her through to a seemingly legitimate landing page with Microsoft branding in place, where she inputted her email login details. Assuming that her account had been verified, the employee gave no further thought to the incident. However, by inputting her credentials on this login page, the employee had inadvertently passed on her details to a fraudster.

To make matters worse, the city government had not enabled multi-factor authentication on staff email accounts, so the fraudster was able to use the credentials to access this employee’s account remotely. This allowed the fraudster to monitor communications to and from the account and gather valuable information about any upcoming transactions.

As it happened, the city government was in the process of building a new social housing development and had contracted a third-party construction firm to carry out the building work on the project. The construction firm would send regular invoices for the work carried out to the city’s finance department, who would then arrange for a payment to be made to the construction firm’s bank account. The fraudster managed to find the email correspondence between the employee in the finance department and the finance director of the construction firm, and in the process, the fraudster established that the latest invoice, totaling $213,456, had been sent over and was due to be paid within a few weeks. Having spotted a lucrative opportunity, the fraudster chose this moment to strike.

Scam set up in a flash

The fraudster’s first step was to set up a forwarding rule in the employee’s email account. Forwarding rules are settings that can be applied to an email account which ensure that certain emails are automatically forwarded to a specific folder or to another email account. In this case, the fraudster set up a forwarding rule that meant that any emails that featured the construction firm’s genuine domain name were automatically marked as read and sent directly to the account’s deleted items folder.

The next step was to set up an email address impersonating the construction firm’s finance director. To the untrained eye, this was exactly the same as the finance director’s, but crucially omitted a character from the domain name. So rather than reading Joe.Bloggs@XYZconstruction.com, it read Joe.Bloggs@XYZconstuction.com.

The final step was to send an email to the employee in the city’s finance department from this fake account. In the email, the fraudster explained that the construction firm’s usual account was being audited and that meant that they were pausing all transactions while this was taking place. The email then went on to explain that a temporary account had been set up as an alternative and that all upcoming invoice payments should be sent there in the meantime, with the fraudster attaching a document with the new account details attached.

The fraudster also added some touches to the email to make it look as authentic as possible. For example, the fraudster forwarded the original email correspondence between the city government’s employee and the construction firm’s finance director to the fraudulent email address, with the fraudster then responding to this email correspondence and making it look as though the fake email was part of the original email chain. The fraudster also signed off with the finance director’s genuine email signature and the document with the fake account details featured the construction firm’s genuine logo and address details.

With the fraudster’s email forming a part of the original email chain and coming from a seemingly identical email address, along with a plausible excuse for changing the account details temporarily, the employee in the city’s finance department never doubted the legitimacy of the request and the construction firm’s account details were changed, resulting in $213,456 being sent to the fraudulent account.

Discovered too late

It was only when the construction firm’s finance director called up the city’s finance department a few weeks later to inquire about the status of the payment that the scam was finally uncovered. The banks involved and local law enforcement agencies were immediately notified about the scam and attempted to recover the loss, but by this point it was too late to retrieve the funds as they had already been transferred out of the
fraudulent account.

With the lost funds deemed unrecoverable and the construction firm still expecting its invoice to be paid, the city government had no choice but to pay the invoice again, resulting in a significant financial loss. Thankfully, however, the city was able to recoup the stolen funds under the cybercrime section of its cyber policy with CFC, which provides cover for social engineering-style losses such as these.

Follow-up with a call and other key takeaways

This case highlights a few key points. Firstly, it illustrates why any organization that is undertaking a construction project should be extra vigilant when it comes to funds transfer fraud. Cybercriminals know that any construction project is likely to require sizable transfers of money, which makes it a particularly lucrative and tempting area for them to target. Any organization involved with a construction project, whether it’s the entity that’s paying for the project or the contractors carrying it out, should be on their guard to prevent funds from being intercepted by fraudsters.

Secondly, it shows just how skillful cybercriminals are becoming at parting innocent organizations from their money and how difficult it is to spot a fake. In this case, the fraudster managed to successfully impersonate Microsoft and manipulate the city’s employee into handing over her login details; set up a forwarding rule to prevent any genuine emails from the construction firm from reaching the employee and jeopardizing the scam; set up a fraudulent email address that was virtually identical to the construction firm’s finance director’s address; make it look as though the fake email sent to the employee was part of the original email chain, and make use of the finance director’s genuine email signature and the construction firm’s logo and address on the document containing the fake account details.

Finally, it highlights the importance of having call back procedures in place. Call back procedures work by ensuring that whenever a new payee account is set up or a change of account is requested, the request is verified by having a member of the accounts department call the person or company requesting the change on a pre-verified number to confirm that it is legitimate. If the city’s finance department had had this procedure in place and the employee had followed it, it’s highly unlikely that the funds would have been intercepted. Having call back procedures in place, alongside staff training on phishing risks and multi-factor authentication on email accounts, can significantly reduce an organization’s exposure to funds transfer fraud. Nevertheless, it’s worth noting that none of these methods are fool-proof and it’s very difficult to eliminate this risk entirely, especially when human error is factored in. And that’s why cyber insurance can be such a useful purchase, providing a valuable safety net when things go wrong.


Remote Working Vulnerabilities Hit School Hard

The CFC case study below explains how hackers accessed a school’s systems through remote desktop protocol and held data to ransom.

The education sector is no exception to the massive technological changes that have occurred over the past 20 years or so. Schools in particular are now increasingly dependent on their computer systems to provide students with a 21st century education. Both teachers and students now regularly make use of computer technology in the classroom, whether that be through delivering PowerPoint presentations on interactive whiteboards, conducting interactive learning on tablets and laptops, completing online assessments and tests, or using software programs for compiling student grades and monitoring classroom attendance. Schools are also seeing a shift away from paper filing and are storing more and more of their important data in an electronic format.

Although the use of computer technology has undoubtedly brought many benefits to schools, their increasing dependence on computer systems and electronic databases also makes them vulnerable to cyber losses. If teachers and staff are unable to gain access to their computers, whether that be as a result of a malicious cyber attack or a non-malicious system failure, it can result in serious operational disruption for the school. And if a hacker gains access to sensitive electronic data held by the school, it could have a negative impact on the school in terms of both its finances and its reputation.

One of CFC policyholders affected by a cyber loss was a private school responsible for educating approximately 800 students aged 11-18, with the school catering for both day and boarding students.

The incident began when a hacker managed to gain access to the school’s computer systems through the remote desktop protocol (RDP). RDP allows remote users to connect to the desktop of another computer through a network connection and is typically used by schools to allow staff and students to access their networks whilst they are not on school premises. In this case, the port that the school used for RDP access was exposed directly to the internet. Hackers are constantly using scanning tools to identify vulnerable organizations and establish any weak points that they may have in their cyber security, and an RDP port that is exposed directly to the internet is one of the most common that they look out for.

Having identified this area of weakness, the hacker looked to gain access to the school’s network by initiating a brute force attack against a local administrator account. A brute force attack is where a hacker uses a computer program to crack passwords by trying numerous possible password combinations in rapid succession, with the program typically trying a long list of the most commonly used passwords. Generally speaking, the longer and more complex the password, the more difficult and time consuming it is for the program to crack. Unfortunately, however, the school’s local administrator account had a weak password in place that had been used as a default but never been changed. With the password lacking in complexity, the program quickly cracked the password. What’s more, the school did not have multi-factor authentication enabled for RDP access, so as soon as the password was cracked, the hacker was able to gain access to the school’s network without having to go through a second verification procedure.

Upon gaining access, the hacker took the opportunity to unleash ransomware across the school’s computer systems. Ransomware is a type of malicious software that works by encrypting data on a network, and then demands that a ransom be paid in exchange for a decryption key to regain access to the data. In this case, the ransomware had encrypted multiple servers, effectively locking the school out of its computer systems, and the hacker demanded a payment of 2 bitcoin for the decryption key. In many cases, it’s possible to mitigate ransomware attacks by recovering from back-up. However, the school’s back-ups were contained on one of the servers encrypted by the ransomware, rendering them useless.

Fortunately for the school, the ransomware attack occurred over the course of a school holiday, but without being able to restore from back-ups, the school recognized that a great deal of disruption would ensue if its computer systems were still unavailable once students returned. For example, the school would be unable to have ready access to highly important information, such as the financial information needed for accounting purposes, details about prospective students for the next school year and critical information about students under the school’s care, such as medical records and dietary requirements;  teachers would be unable to make use of interactive whiteboards to provide presentations to students; students would no longer be able to use e-learning courses in the classroom or complete online assessments; and boarding students would be unable to complete homework assignments on schools computers in the evening.

With the prospect of significant operational disruption looming over the school, it was at this point that the incident was notified to CFC’s incident response team. The team’s first priority was to establish what ransomware variant had been used in the attack by looking at a copy of the ransom note and a sample of the encrypted files. Having identified the likely ransomware variant, the team then carried out some research to see if there was any way of removing the ransomware without paying the ransom demand. One of our incident response partners produces a regularly updated list of freely available decryption keys for known ransomware variants. Luckily for the school, the team were able to find a decryption key online. With the decryption key to hand, the school was able to begin the process of decrypting the affected data and applications without having to pay the ransom.

However, even though the school had managed to regain access to its computer systems, there was still a question mark over whether the attack had resulted in a data breach. The ransomware attack had impacted servers containing sensitive data, including parents’ names, phone numbers, and residential addresses; data on past and present students, such as grades, attendance, disciplinary and medical records; information on staff, such as contact details, addresses and bank account details; and information on prospective students who were likely to be inducted in the next school year. As the school was subject to local data breach notification laws, it meant that if it transpired that some or all of this data had been accessed or exfiltrated in the course of the attack, the school would have to notify the affected individuals, potentially resulting in a regulatory investigation and damaging the school’s reputation in the eyes of staff, students and parents alike.

In order to address this issue, we engaged one of our incident response partners to conduct a forensic investigation to establish how the hacker had gained access to the insured’s computer systems and whether they had accessed any sensitive data whilst they were there. Unfortunately, when the hacker had carried out the attack, they had set up a temporary user profile, which meant that there was no way of knowing for sure what folders the hackers may have explored and what files may have been opened.

Nevertheless, our incident response team and our forensic partners were able to establish some pertinent facts about the case. First, based on previous incidents and threat intelligence, the ransomware variant used during the course of the attack was not known to be capable of accessing or exfiltrating data. Second, the bandwidth usage logs obtained from the school’s internet service provider did not show high levels of traffic during the period that the hacker had access to the school’s computer systems, indicating that there had not been any major data exfiltration from the school’s network. Third, the hacker was only logged on to the school’s computer systems for a short period of time, suggesting that they were primarily focused on deploying the ransomware rather than seeking out sensitive data.

Given this, our forensic partners determined that the hackers main motive appeared to be financial gain through the use of ransomware, rather than the theft of sensitive data. After engaging legal advice to determine whether a data breach notification would be required, the lawyers advised that, based on the findings of the forensic investigation, no notification would be needed in this instance, thus ensuring that the school’s reputation was not damaged unnecessarily.

The total cost of carrying out a root cause analysis, network security assessment, forensic investigation and engaging legal counsel came to £17,560, all of which was covered by the school’s cyber policy with CFC.

This claim highlights a few key points. Firstly, it highlights the importance of securing the remote desktop protocol (RDP) effectively. If organizations are using RDP, they should make sure that it is not directly exposed to the internet and use a virtual private network (VPN) instead. In addition, businesses should ensure that they have good password hygiene in place and enable multi-factor authentication for any remote access to the network. If the school had had these measures in place, it is highly unlikely that the hacker would have gained access to its computer systems.

Secondly, it highlights the importance of having a good data back-up policy. In this case, the school had been prudent enough to back up its data. However, by not saving these back-ups external to the school’s servers, it meant that when the ransomware started encrypting, it encrypted the back-ups too. Ideally, businesses should maintain daily offline back-ups to help prevent back-ups from being compromised during the course of an attack.

Finally, this claim highlights the value of cyber insurance. When you buy a cyber insurance policy, you are not just buying a promise to pay valid claims. You are also paying for a service to help and advise you when things go wrong. In this case, CFC’s incident response team and our partners were able to provide threat intelligence on the ransomware variant and obtain a free decryption key, enabling the school to regain access to its computer systems; conducted a root cause analysis to establish how the hacker got into the system, enabling the business to identify and remedy any cyber security weaknesses; and conduct a forensic investigation that allowed us to determine that the ransomware attack had not resulted in a data breach, thus preventing the school from conducting an unnecessary notification procedure and needlessly damaging its reputation.

Source: cfcunderwriting.com


Cybercriminals Exploiting Coronavirus

Public concern and working-from-home mandates are providing opportunities for cybercriminals.

This CFC advisory provides some background on these risks along with some easy-to-implement steps that businesses can follow to avoid falling victim.

COVID-19 increasingly being used in phishing attempts

As new cases of the COVID-19 Coronavirus continue to be reported daily, cybercriminals have been leveraging the situation to take advantage of those looking for information on the outbreak. Scams include the following and are changing each day:

  • The Sophos Security Team has spotted emails impersonating the World Health Organization (WHO). The emails ask victims to “click on the button below to download Safety Measure”. Users are then asked to verify their email by entering their credentials, redirecting those who fall for the scam to the legitimate WHO page, and delivering their credentials straight to the phisher.
  • Interpol has warned of a large increase in fraudulent websites claiming to sell masks, medical supplies and other high demand items that simply take money from victims and never deliver the promised goods. It is advisable that internet users purchase items only from established and reputable sources.
  • There have been reports of airlines and travel companies being impersonated by fraudsters in a bid to either obtain sensitive information, like passport numbers, or install malware on victims’ computers. They may say they want to advise you of COVID-19 infected passengers on past flights you’ve taken or offer discounts on future flights. When in doubt, we advise users to be vigilant when clicking on any links, delete any suspicious emails, and not disclose sensitive information if you are approached unexpectedly.
  • Fraudsters are also developing fake charitable donation campaigns which claim to help individuals and communities impacted by the Coronavirus. Any money donated is sent to fraudulent accounts. Again, if you are wanting to support relief efforts, make sure to research the organizations you are looking to donate to.
  • A Twitter user has identified another malware campaign purporting to be a “Coronavirus Update: China Operations”. The emails have attachments linking to malicious software.

As global concern about the coronavirus grows, it is likely that threat actors will continue to abuse this outbreak to their advantage.

Increased remote working can open gateway to hackers

Remote desktop protocol (RDP), when set up correctly, is a great tool for remote working. However, using it without multi-factor authentication (MFA) enabled or on an insecure network can open the gateway to hackers. In fact, in 2019, 80% of the ransomware attacks we handled were initiated through RDP.

Businesses that start using RDP for remote working during the outbreak should be aware of some of the cybersecurity risks it can pose and ensure it is being used securely. Employees should always log on within a trusted network and ideally work with their IT department to secure personal devices – and implement MFA – prior to remote working.

CFC recommendations

We suggest implementing the following steps to bolster security:

  1. Test remote log-in capabilitiesNot only should personal devices be configured for secure remote working, but business should ensure that multi-factor authentication (MFA) is set up immediately. MFA is an authentication process that requires more than just a password to protect an email account or digital identity and is used to ensure that a person is who they say they are by requiring a minimum of two pieces of unique data that corroborates their identity. Implementing this significantly reduces the chances of cybercriminals being able to log into a business’s RDP. For more information on MFA and how to implement it, click here.
  2. Train your employees on how to spot a phishing emailAs a CFC cyber policyholder, you can get free access to a range of risk management tools, including CyberRiskAware, an e-learning tool focusing on phishing attacks. This valuable tool teaches people within your business to be more vigilant when in comes to opening attachments, clicking on links, transferring money, or sending sensitive information. To find out more about it, including instructions on how to access it, click here.
  3. Prepare for operational disruption in advancePut simply, prepare for the worst. As with so many cyber incidents, time is of the essence so ensure you have an incident response plan in place, a template for which you can access for free as a CFC cyber policyholder. And as ever, if you believe that one of your employees has fallen victim or that you are experiencing any kind of cyber event, notify CFC as soon as possible so that we can help you.
  4. Finally, be vigilantWhat’s becoming clear as this pandemic plays out is that cybercriminals are shifting tactics daily. If you see something on social media or receive an unsolicited email that seems too good to be true, it probably is. Aside from learning how to spot phishing emails, make sure to do your research, use reputable companies, and follow-up requests for money or information with a phone call using a number from a separate, trusted source.

Source: www.cfcunderwriting.com


How to Stay Safe Online

The last couple of years has seen a surge in cyber events affecting businesses of all sizes. With the growing volume and sophistication of online threats like viruses, ransomware, and phishing scams, it’s important to know the proper practices to stay safe online.

From paying attention to browser warnings to being mindful of app permissions, a few small changes can make a big difference when it comes to cybersecurity. That’s why CFC’s in-house cyber claims and incident response team has assembled this handy infographic, which contains oodles of easy, actionable tips on things you can do – today – to become more secure.

Click here to download the full infographic below.

Source: www.cfcunderwriting.com


Anatomy of a Cyber Policy

Cyber insurance policies tend to be modular in nature, meaning that they consist of a variety of different coverage areas and, for many, that has led to confusion around how exactly this cover fits together to create a uniform whole.

To help explain this further, CFC has dissected their cyber policy section by section to show how each part of this body of coverage functions.

Click here to download the full info-graphic below.

Source: www.cfc.com

 


Blog

FOLLOW OUR BLOG

Receive notifications of new posts automatically.



ABEX - AFFILIATED BROKERS EXCHANGE IS ON FACEBOOK.

Like us on Facebook

Connect with us on LinkedIn