Insurers see cyber extortion on the rise.Extortion extortion, in law, unlawful demanding or receiving by an officer, in his official capacity, of any property or money not legally due to him. Examples include requesting and accepting fees in excess of those allowed to him by statute or arresting a person and, with isn't just a business for local neighborhood thugs anymore. While the Internet has helped both small and large companies expand their businesses, it's also opened the door to criminals savvy in technology. Today, companies can be threatened by organized criminals in other countries, who can disrupt their networks--and their business--if the victim doesn't pay them cash. "It's an epidemic," said Brad Gow, vice president of Ace Professional Risk. Five or six years ago, cyber (1) From "cybernetics," it is a prefix attached to everyday words to add a computer, electronic or online connotation. The term is similar to "virtual," but the latter is used more frequently. See virtual. crime was mostly individual hackers targeting individual companies. But today, gangs of programmers with ties to organized crime, often in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , are targeting not only major financial institutions, but small and middle-market companies. The most common cyber extortion threat is denial of service attacks An assault on a network that floods it with so many additional requests that regular traffic is either slowed or completely interrupted. Unlike a virus or worm, which can cause severe damage to databases, a denial of service attack interrupts network service for some period. , where the hackers threaten to flood a site with so much traffic that it crashes, blocking legitimate business from reaching the site. It's estimated 60% to 70% of viruses on the Web are written by these cyber extortionists, Gow said. The viruses come with programs called "bots bots maggots of flies which infest animals, especially horses and sheep. The term bot is also loosely used to include the invasive maggots such as those of Cuterebra and Wohlfahrtia spp. horse bots see gasterophilus. ," which act like robots and allow the extortionists to take control of the infected systems and use them to attack their victims. "They've taken control of tens of thousands of both private and corporate systems," Gow said during an interview at the Risk and Insurance Management Society's annual conference in Philadelphia. Larger companies have the finances to act defensively to thwart attacks by blocking sites of offending Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. . "It's expensive though, maybe $150,000 to $200,000," Gow said. Many small companies opt to simply pay off the extortionists, he said. Extortionists have found many victims will cough up $40,000 to $50,000 to make them go away. It's estimated 6,000 to 7,000 companies may have been victims of cyber extortionists, but only about one-third of all companies report the crime to the FBI, because they'd rather not have the publicity. Ace has launched a policy, Ace Digital DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. , geared to protect companies from a number of cyber risks, including cyber extortion. The policy covers extortion money and associated costs. |
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