Cyber crime is fastest growing economic crime

Cyber crime is up 20% since 2014 and is the fastest growing economic crime, according to PricewaterhouseCoopers’s (PWC) latest biennial Global Economic Crime Survey.

Cyber crime is up 20% since 2014 and is the fastest growing economic crime, according to PWCThe UK has seen a double digit rise in economic crime against corporates in the past two years, with 55% of organisations affected – up 11% since 2014 and well above the US (38%) and China (28%).

The survey found that 60 % of economic crime in the UK was committed by external perpetrators, up from 56% in 2014. While there was a decline in economic crime perpetrated by employees (31%), there was an 11% increase in fraud committed by senior management to 18%.

“While the prevalence of traditional fraud – such as asset misappropriation – has fallen since 2014, there has been a huge rise in organisations reporting cyber crime, with technology driving almost every other area of economic crime,” said Andrew Gordon, PwC’s global and UK forensics leader.

“Businesses need to minimise the opportunities for economic crime through rigorous fraud risk assessment, supported by a culture based on shared corporate values, robust policies and compliance programmes,” he said.

Some 44% of UK organisations that experienced economic crime in the past two years were affected by cyber incidents, a jump of 20% from 2014 and 12% greater than the global response of 32%.

The rise of cyber crime, the report said, is in stark contrast with some of the traditional forms of economic crime, including asset misappropriation and procurement fraud, which have declined.

Just over half of UK organisations say they expect to be the victim of cyber crime in the next two years, suggesting it will become the UK’s largest economic crime.

Global corporate intelligence leader at PwC Mark Anderson said cyber attackers are now more ambitions than ever.

“Their aim goes beyond targeting financial information to include a company’s ‘crown jewels’ – customer data and intellectual property information, the loss of which can bring down an entire business,” he said.

“The threat of cybercrime is now a board level risk issue, but not enough UK companies treat it that way.”

UK respondents say the greatest concern about a cyber attack is the potential disruption to services, with 31% saying it would have a medium to high impact.

Surprisingly, almost half say that cyber crime would have no effect on their reputation, and almost 60% are not concerned about the potential for theft of intellectual property.

The strong shift towards more senior and experienced employees carrying out corporate fraud in the UK should be of particular concern, the report said, because senior management fraud is often more difficult to detect and prevent, and usually has a much greater effect on an organisation.

While those in middle management remained the most responsible for economic crime (36%), half the instances committed by staff in the UK involved employees over the age of 40, and the number carried out by staff over the age of 50 tripled from 6% to 18%.

The survey found that 45% of internal fraudsters had worked for more than five years in the organisation they defrauded and 21% had more than a decade of service.  In contrast, the number of junior staff carrying out economic crime has fallen since 2014 from 45% to 28%.

While the majority (86%) of UK organisations have formal business ethics and compliance programmes in place, far fewer (63%) back up these rules with regular training and communication.

Financial services companies are set to be the biggest spenders on compliance in the UK in the next two years, while compliance budgets for other industries are under pressure as they face demands to do more with less, according to the survey.

The survey also found that 20% of UK organisations say they have never performed a fraud risk assessment, while 44% do so annually. Some 5% of respondents say they have been asked to pay a bribe in the past 24 months, while 7% feel they lost a business opportunity to a competitor who was willing to pay it.

More than a fifth of frauds were detected through suspicious transaction monitoring, 14% through fraud risk management, 8% through data analytics, 8% through internal audit and 8% through accidental discovery.

Small business risks cyber attack damage

Small businesses are underestimating the impact a cyber attack would have on their reputation and must take steps to protect themselves.

Small businesses are underestimating the impact a cyber attack would have on their reputation and must take steps to protect themselvesThe warnings come as a result of research published according to the findings of the Small Business Reputation and the Cyber Risk report, by the Government’s Cyber Streetwise campaign and KPMG.

Less than a quarter of small businesses cite cyber security as a top concern, but it’s of vital importance to consumers and within the supply chain.

The impact of a cyber attackbreach can be huge and long lasting, affecting brand, client retention and ability to win new business.

In the past few years there has been a rapid expansion in the development and adoption of new communications technologies which continue to transform Government, business and the ways in which we interact with each other. Cyber crime undermines confidence in our communications technology and online economy.

There were an estimated 5.1 million incidents of fraud and 2.5 million incidents falling under the Computer Misuse Act recorded last year (ONS, 2015). Add in recent high profile hacking cases and the issue of cyber security is now more important than ever.

Cyber Streetwise and KPMG surveyed 1,000 small businesses and 1,000 consumers across the UK to assess how small businesses feel about cyber security, how they are protecting themselves and the impact of a cyber breach on their reputation.

Key cyber security research findings:

  • Cyber security was cited as one of the top concerns by less than a quarter of small businesses (23%), yet it is fast becoming the only way to do business:
  • 83% of consumers surveyed are concerned about which businesses have access to their data and 58% said that a breach would discourage them from using a business in the future.

Recently published KPMG Supply Chain research supports this; 94% of procurement managers say that cyber security standards are important when awarding a project to an SME supplier and 86% would consider removing a supplier from their roster due to a breach.

UK small businesses value their reputation as one of their key assets. Yet they are hugely underestimating the likelihood of a cyber breach happening to them and its long term impact:

60% of small businesses surveyed have experienced a cyber breach, but only 29% of those who haven’t experienced a breach cited potential reputational damage as an ‘important’ consideration.

The impact of a cyber breach can be huge and long lasting. 89% of the small businesses surveyed who have experienced a breach said it impacted on their reputation.  Those who experienced a breach said the attack led to:
Brand damage (31%)
Loss of clients (30%)
Ability to win new business (29%)

Quality of service is also a risk. Those surveyed who experienced a cyber breach found it caused customer delays (26%) and impacted the business’ ability to operate (93%).

The full report was published at:

UK businesses expect cyber attacks to cost £1.2 million

Half of UK businesses expect to be hit by a cyber attack and that recovery costs will be £1.2 million or more.

Half of UK businesses expect to be hit by a cyber attack and that recovery costs will be £1.2 million or more.This is the highest figure globally, according to the Risk:Value 2016 report by information security and risk management company NTT Com Security.

The report is based on a survey of business decision-makers in the UK, the US, Germany, France, Sweden, Norway and Switzerland.

Although about 50% of UK respondents said information security was vital to their organisation and agreed it was good practice, 20% admitted that poor information security was the single greatest risk to the business, ahead of decreasing profits (12%), competitors taking market share (11%) and on a par with lack of employee skills (21%).

Well over half (57%) agreed that their organisation would suffer a data breach at some point, while only one third disagreed and one in 10 said they did not know.

They expected recovery from a cyber attack to take an average of two months, and they anticipated a 13% drop in revenue, on average, following a breach.

The survey showed that recent high profile data breaches are starting to hit home, with organisations spending 11% of their IT budgets on information security, up from 10% the previous year.

However, nearly a quarter of the UK businesses surveyed revealed that more is spent on human resources than on information security.

Detailing remediation costs following a security breach, the report said respondents indicated that they expected 18% to be spend on legal fees, 18% on fines or compliance costs, 17% on compensation to customers, and 11% on third-party remediation.

Other anticipated costs included PR and communications (14%) and compensation paid to suppliers (12%) and to employees (11%).

According to the report, the vast majority of UK respondents admitted they would suffer both externally and internally if data was stolen, including loss of customer confidence (66%) and damage to reputation (57%), as well as direct financial loss (41%). More than one-third of decision-makers (34%) expected to resign or expected another senior colleague to resign because of a breach.

The study found that although only 41% of UK organisations have a disaster recovery plan in place and only 40% have a formal security policy, in both cases almost half are in the process of implementing or designing one.

In terms of responsibility for managing a company’s recovery plan, 15% of respondents said the CEO now has responsibility, although it still largely falls to the chief risk officer, chief information officer or chief security officer.

While 77% agreed it is vital that their business is insured for security breaches, only 26% have dedicated cyber security insurance – but 38% are in the process of getting a policy.

One in five UK respondents said they did not know if their organisation had any type of insurance to cover for the financial impact of data loss or an information security breach.

Cyber criminal activity by UK teens grows

More than 10% of UK teens say they know someone who has engaged in an illegal cyber activity, a survey has revealed.

More than 10% of UK teens say they know someone who has engaged in an illegal cyber activity, a survey has revealed.The survey was commissioned and published by security firm Kaspersky Lab to mark Safer Internet Day 2016 yesterday- which aims to promote the safe, responsible and positive use of digital technology for children and young people.

The survey also found that just over one third of respondents would be impressed if a friend hacked a bank’s website and replaced the homepage with a cartoon, and one in 10 would be impressed if a friend hacked the air traffic control systems of a local airport.

When asked how they would feel if a friend found their way into a celebrity’s online email account and discovered lots of private pictures, 18% said they would be impressed, and 17% would be impressed if a friend managed to obtain all the names and addresses of people who had bought adult films online.

More than a quarter of respondents said they knew how to hide their IP address, 41% said they knew about malware, 44% knew about phishing, 24% knew about distributed denial of service (DDoS) attacks, 17% knew about ransomware, and 13% knew about crypto-malware.

Recent research by the National Crime Agency (NCA) revealed the average age of a cyber criminal is now just 17, raising concern that youngsters are increasingly becoming involved in cyber crime, many of them unwittingly.

In the light of this finding, public awareness and understanding of the online behaviour of young people is vital, said David Emm, principal security researcher, Kaspersky Lab.

“It’s frighteningly easy for teenagers to find their way into the dark corners of the internet today as they explore and experiment or take their first steps towards making some easy money online by searching for tools and advice,” he said.

Once lured in, youngsters are vulnerable to exploitation by cyber criminals who use them to distribute and create malicious software or help launder funds from cyber crime, said Emm.

UK based criminals were the second highest originators of cyber crime attacks after the US in the second quarter, according to ThreatMetrix. Rising cyber crime suggests criminal law does not deter criminals and that a better legal solution is required to prevent further rises.

The survey also revealed misguided loyalty among teenagers. When asked what they would do if a friend was doing things online that could be illegal, more than half said they would tell the friend to stop, but would not tell anyone else.

One third said they would not get involved, 22% said they would ask about it but not join in, and only 21% said they would report it to the police.

The NCA recently launched a campaign aimed at preventing young people from becoming involved in cyber crime.

The Safer Internet Day 2016 campaign website provides guidance for parents and teachers on how to recognise signs of cyber criminal involvement and ways of encouraging the positive use of cyber skills.

SME’s poor security practices targeted by ransomware

SME’s poor security knowledge and practices are being targeted by ransomware.

SME's poor security knowledge and practices are being targetted by ransomware.It is important not to underestimate the scale of ransomware attacks or to believe that you are safe if you are not a Microsoft user, as the first attacks on Android devices were identified in 2011.

According to one industry report, the number of cyber ransomware attacks increased in 2014 by more than 4,000%, with small to medium sized enterprises (SMEs) being the main target due to poor security practices.

On the technical side, we can have spam, malware and bad URL detection engines or services that can be installed in networks – generally as part of an internet security appliance or firewall – rather than individual boxes installed in front of email servers.

The reason we would want such protection as part of the general internet connection is to provide protection for email, browsing and other internet related operations such as file transfer and remote access.

There are also a number of very good commercial cloud based email spam, malware and URL detection services available. These are well worth a look for smaller enterprises that must consider costs of ownership, support and overall effectiveness.

Even with the best spam, malware and URL detection services, some emails that could form the start of a ransomware attack may get through. These emails contain a URL link that, when clicked, will take the user’s web browser to a website that will attempt to download the ransomware.

These emails could not have been detected as malicious for a number of reasons, such as the URL being too new to have been identified as malicious; the patching or updating of an onsite box being out of date; or the URL pointing to a perfectly legitimate website that has been compromised in preparation for a watering hole attack.

The rise in legitimate websites being compromised for the purposes of executing watering hole attacks as a way of delivering malware – including ransomware – means enterprises need to add malware detection to web browsing activities.

Protecting against a ransomware attack

Having got the technical side sorted according an enterprise’s risk appetite and budget, what else can be done to help protect against a successful ransomware attack?

Staff awareness training and regular follow up initiatives are key. It is important to make staff aware that unexpected emails – even from known sources – are suspicious, particularly those that require a URL link to be activated.

If all else fails and a ransomware attack is successful, then having access to good, well-tested backups with at least one copy that is held off network will be vital in service restoration. Note that the off network backup itself should not be used as is, but copied. The copy should then be used to bring the network back, which will protect the good backup from being compromised.

TalkTalk lost 100,000 customers after cyber attack

TalkTalk has admitted that is has lost 101,000 customers since it’s cyber hacking which saw the personal information of 155,000 people compromised.

TalkTalk has admitted that is has lost 101,000 customers since it's cyber hacking which saw the personal information of 155,000 people compromised.The breach shut down TalkTalk’s sales operation for some time and substantially affected its ability to bring on board new customers and upsell mobile, broadband and TV services, it said.

These sales channels took longer than expected to come back online, with full functionality not being restored to its mobile services sales operation until January 2016.

The inability to sell anything meant that TalkTalk saw fewer net customer adds, which, in addition to the high customer churn, had an impact on the headline figure, it said.

The communications service provider (CSP) disclosed the figures in its latest quarterly trading update, in which CEO Dido Harding said it was encouraging to see the business getting back to normal after a period dominated by the breach.

“Our customers have responded well, with almost half a million choosing to take up our unconditional offer of a free upgrade,” said Harding.

“Both churn and new connections recovered during December and January and independent external research has revealed that customers believe we acted in their best interest.

“In fact, trust in the TalkTalk brand has improved since just after the attack and consideration is higher now than it was before the incident.”

TalkTalk estimated the trading impact of the breach at £15m, and said it now looked like the incident would incur exceptional costs of £40-45m, substantially more than it had previously forecast.

These costs include restoring its online capability with fit-for-purpose security measures in place, associated IT costs, incident response and consultancy costs, and free upgrades.

TalkTalk reiterated its confidence in its long-term outlook, and said it saw regulatory opportunities ahead that could support growth in its fixed line and mobile business.
Losing confidence

It is possible that the true number of customers lost was higher than TalkTalk claimed because it was counting net additions in its figures- as such the total loss could be as high as 250,000.