Ransomware: What Small Business Owners Need to Know
Businesses lose billions of dollars each year to ransomware – a form of cybercrime that can also rob you of precious time and data. Ransomware is on the rise and increasingly puts small and midsized enterprises in the crosshairs. This month, we’ll look at what ransomware is, the threat it presents, and how small businesses can protect themselves.
Ransomware is a type of malicious software, or malware, that can be inadvertently downloaded by anybody in your company. It crawls through your computer system, searching for sensitive information and encrypting files so you can’t access them. The criminals then demand a fee in exchange for giving you back control of your files. They may try to extract additional money from you if they’ve found consumer data like credit card numbers that could be sold to other scammers. Often, victims will never recover their data even if they pay the ransom.
Experts have specified three primary vectors that ransomware spreads through. In a phishing attack, the criminal sends a message or email aiming to deceive the recipient into downloading an attached file or following a hyperlink. In a software attack, the scammer hacks into commonly used programs or disguises malware as a legitimate program. In a Remote Desktop Protocol (RDP) attack, cyberthieves get access to a computer by taking advantage of security weaknesses in RDP programs, which are increasingly used by telecommuters. Unsurprisingly, this last tactic has skyrocketed in the wake of the COVID-19 pandemic.
A Widespread Danger
In 2014, the Internet Crime Complaint Center received about 1,700 complaints about ransomware. By 2020, the number was nearly 2,500. It’s a form of cybercrime that offers a big reward for a relatively small risk, because high-level malware code and anonymized forms of payment like cryptocurrency allow many perpetrators to evade enforcement.
It’s often impossible to fight ransomware once it’s in your computer system. Thus, many businesses have been forced to pay outrageous ransom fees to avoid losing their files permanently. And if the number of ransomware complaints have grown, it’s nothing compared to the increase in demanded fees: they’ve shot up from about $4,000 in 2018 to over $170,000 in 2020. Of course, the total cost to companies is even higher, because these numbers don’t include losses in revenue and productivity or the longer-term consequences of data losses or exposure. Worldwide, the total cost of ransomware is expected to be in the tens of billions in 2021.
Why Small Businesses Are at Risk
Typically, individuals aren’t willing to pay an enormous ransom to get files back on their personal computer. For this reason, scammers are more likely to go after small and midsized businesses that have important files and data that they might spend good money to protect. Meanwhile, unlike giant corporations, these entities might lack the kinds of sophisticated security systems that could foil malware or expose the criminals behind it. In addition to private businesses, frequently targeted organizations include schools, hospitals, police departments, and municipal agencies.
Because you may not be able to control if a criminal will attempt a ransomware attack on your company, it’s essential to protect your computer systems, train your staff, and follow best practices that will lower the chance that such an attempt will result in a disastrous loss. In our next biweekly blog post, we’ll go over some action items you can implement to protect your business.
Moving Your Business Forward
When it comes time for a tech upgrade or another major investment in your enterprise, consider Nu Direction. We bring you the speed of fintech with the spirit of community lending. Eligible small businesses can receive instant preliminary offers and secure funding in as little as one week. Apply today!
The information contained herein is for general informational purposes only and does not constitute tax, legal, or business advice.
Brought to you by Nu Direction Lending, a digital-first business lender that was formed and is funded by credit unions. To learn more about term loans for your business, visit nudirectionlending.com or contact us by email at email@example.com or by phone at 866-354-7151.
Nu Direction Lending is a digital-first business lender that was formed and is funded by credit unions. We combine the speed and convenience of online lenders with the personalized touch of the local credit unions who help fuel our local economies.