Cybercrime Frequency and Complexity Will Continue Into 2017

Cybercrime seemed to be in the news daily in 2016. From the hack of the Democratic National Committee email accounts to the massive data breaches suffered by large technology companies, a major restaurant chain, and numerous government agencies, the news seemed inundated by a steady stream of high profile cybercrime. What is in store for 2017? Given the proliferation of electronic devices and data in our society, we can reasonably expect cases of cybercrime to continue to increase in number and complexity in the new year.

IoT Hacking
On October 21, 2016, a massive distributed denial of service (DDoS) attack occurred against the Domain Name System (DNS) provider, Dyn, causing widespread disruption of internet activity across the United States. A DNS is the part of the internet infrastructure that is responsible for translating domain names into numeric IP addresses, which ensures that information requests are routed to the proper server. The DDoS attack was accomplished when the attackers hacked a large number of unsecured internet-connected digital devices (i.e., the Internet of Things (IoT)), such as CCTV video cameras and digital video recorders and directed the devices to transmit huge amounts of traffic to Dyn’s servers. In response, the Department of Homeland Security and the National Institute of Standards and Technology (NIST) released their guidance concerning security for IoT devices.

This guidance is a welcome change as the federal government has been slow to provide any leadership on the security for IoT devices. However, it comes too late for the millions of IoT devices that have already been sold. Those devices, as shown by the Dyn DDoS attack, contain flaws and vulnerabilities that can be exploited. Many of these devices still use their default username and password, making them easy for hackers to access and control. Some of these devices also do not encrypt their signals and communications, enabling hackers to capture them with greater ease. Given the increasing number of already ubiquitous IoT devices and their known vulnerabilities, the likelihood of criminals hacking these devices with greater regularity for their own purposes, such as the unauthorized collection of personal information, is fairly high.

DDoS Attacks
Another purpose for which criminals may utilize the IoT devices that they have hacked is as a means of launching DDoS attacks. As evidenced by the Dyn DDoS attack, IoT devices are a readily available source of network traffic that can be easily manipulated and directed toward a target. DDoS attacks are an effective method of disrupting a victim’s website or network and are motivated by a desire to embarrass or incapacitate the victim. Hacktivists (such as Anonymous) and terrorist groups have successfully employed DDoS attacks against major corporations and government agencies and infrastructure. Because there are more sources available than ever before to be exploited for DDoS attacks, these groups are likely to increase not only the frequency but also the severity of their attacks.

Nation States
DDoS attacks are also a potentially devastating weapon for nation states. As infrastructure has become reliant on computer networks and the Internet, rival nation states have increasingly turned to cyberattacks as an acceptable form of warfare. The Dyn DDoS attack show the demoralizing impact a DDoS attack on Internet infrastructure providers could have as Internet traffic across the United States slowed to a crawl for several hours. Parts of the federal, state and local government infrastructure may also be vulnerable to these types of attacks. In addition, nation states already utilize hacking as part of their espionage efforts. State sponsoring hacking currently extends not only to intelligence gathering for military and strategic purposes but also for economic competitive ones. As the battlefield of the twenty-first century continues to shift to the digital world, cyberattacks by nation states will likely become more and more commonplace.

Ransomware Attacks
Ransomware attacks which infect computer systems and encrypt the data on those systems rose exponentially in 2016. Hospitals, school districts, state and local governments, police stations and numerous other organizations were the victims of ransomware attacks in the past year. After a computer or network is infected, ransomware attackers generally demand payment in an amount ranging from a few hundred to a few thousand dollars in Bitcoin in return for decrypting the captured data. Companies typically decide to pay the ransom because the cost of either decrypting or replacing their data usually far exceeds the amount of the ransom. Given how successful these attacks have been, particularly recently, and assuming that the ransoms do not rise to exorbitant levels, it does not strain credulity to believe that criminals will continue to employ them in growing numbers in 2017.

Identity Theft
The number and scope of data breaches has increased dramatically in the past few years. Hackers have stolen billions of items of personal information, including but not limited to names, addresses, birthdates, social security numbers, driver’s license numbers, bank account numbers, payment card numbers, email addresses, usernames and passwords, and health and medical information. This information has been collected, stored, and sold on different sites and forums on the Dark Net. The declining value of stolen personal information on the Dark Net is an indication of the serious surplus in supply. The only remaining way for criminals to realize the full value of this bounty of personal information is to use it to take over existing financial accounts, create new fraudulent accounts, divert legitimate payments, such as tax refunds, and engage in other fraudulent acts of identity theft. In short, the overabundance of stolen personal information available has lowered the barriers for entry for criminals who wish to engage in such fraudulent conduct and strengthened the prospects for a surge in identity theft crimes in the coming year.

Preventive Measures
Is there anything that individuals and companies can do to protect themselves? The best practices recommended by cybersecurity experts can go a long way in preventing, or at least mitigating the impact of, cybercrimes. Individuals should have usernames and passwords that are unique to each of their devices and accounts. Common usernames and passwords are often a typical entry point for criminals into personal devices and accounts. Individuals should also exercise vigilance in reviewing their account statements and avail themselves of the free credit report offered annually by each of the three major credit reporting bureaus. Companies should require the purchasers of IoT devices to input new usernames and passwords and not rely on default usernames and passwords. IoT devices should also be designed so that their signals and communications are encrypted.

Companies should focus on their internal network security. They should schedule penetration testing and vulnerability on a quarterly basis to detect both known and potential vulnerabilities. They should keep the operating system and other software on their systems constantly updated with the latest patches and employ up-to-date and multiple antivirus programs to maximize the probability of preventing a possible malware infection. If companies should utilize employ application whitelisting, which lists the legitimate applications that may be run on a system but blocks other unauthorized programs possible. In addition, companies should invest in educating their employees that malware attacks generally rely on malicious email attachments or links in phishing emails. Employees should be trained to verify the legitimacy of an email before opening an attachment or clicking on a link in the email. As an added precaution, companies may also want to install advanced email spam filtering which will block email messages with attachments from suspicious sources. Finally, companies should backup all critical data and systems on a regular basis in the event that their systems become inaccessible. To ensure optimal protection, these backups should be both offsite and offline. Adopting these practices will not guarantee that an individual or company will not be the victim of a cybercrime, but it will decrease the possibility of that happening.

Originally published in IP Watchdog on February 6, 2017.