Network Intrusions and Ransomware Attacks Overtake Phishing as Main Breach Cause

Network intrusion incidents have overtaken phishing as the leading cause of healthcare data security incidents, which has been the main cause of data breaches for the past 5 years.

In 2020, 58% of the security incidents dealt with by BakerHostetler’s Digitial Assets and Data Management (DADM) Practice Group were network intrusions, most commonly involving the use of ransomware.

This is the 7th consecutive year that the BakerHostetler 2021 Data Security Incident Response (DSIR) Report has been published. The report provides insights into the current threat landscape and offers risk mitigation and compromise response intelligence to help organizations better defend against attacks and improve their incident response. The report is based on the findings of more than 1,250 data security incidents managed by the company in 2020, which included a wide variety of attacks on healthcare organizations and their vendors.

Ransomware attacks are now the attack method of choice for many cybercriminal organizations and have proven to be very profitable. By exfiltrating data prior to encryption, victims not only have to pay to recover their files, but also to prevent the exposure or sale of sensitive data. This new double extortion tactic has been very effective and data exfiltration prior to file encryption is now the norm. Throughout 2020, ransomware attacks continued to grow in frequency and severity.

BakerHostetler reports that the ransoms demanded and the number being paid increased dramatically in 2020, as did the number of threat groups/ransomware variants involved in the attacks. In 2019, there were just 15. In 2020, the number had grown to 75.

Out of the incidents investigated and managed by BakerHostetler in 2020, the largest ransom demand was for more than $65 million. The largest ransom demand in 2019 was ‘just’ $18 million. Payments are often made to speed up recovery, ensure data are recovered, and to prevent the sale or exposure of data. In 2020, the largest ransom paid was more than $15 million – up from just over $5 million in 2019 – and the average ransom payment more than doubled from $303,539 in 2019 to $797,620 in 2020.

In healthcare, the average initial ransom demand was $4,583,090 with a median ransom demand of $1.6 million. The average payment was $910,335 (median $332,330), and the average number of individuals affected was 39,180 (median 1,270). The average time to acceptable restoration of data was 4.1 days and the average forensic investigation cost was $58,963 (median $25,000).

Across all industry sectors, 70% of ransom notes claimed sensitive data had been stolen and 90% of investigations found some evidence of data exfiltration. 25% of incidents resulted in theft of data that required notifications to be issued to individuals. 20% of victims made a payment to the attackers even though they were able to recover their data from backups.

When ransoms are paid, in 99% of cases the payment was made by a third party for the affected organization and in 98% of cases a valid encryption key was provided to allow data to be recovered. It took an average of 13 days from encryption to restoration of data.

Phishing accounted for 24% of all security incidents. Phishing attacks often led to network intrusion (33%), ransomware attacks (26%), data theft (24%), and Office 365 account takeovers (21%).

“In 2020 we saw a continued surge in ransomware as well as an increase in large supply chain matters, further stretching the capacity of the incident response industry,” said Theodore J. Kobus III, chair of BakerHostetler’s DADM Practice Group “Organizations worked to quickly contain incidents – despite challenges in simply getting passwords changed and endpoint, detection and response tools deployed to remote workers.”

It is more common now for legal action to be taken by breach victims. The trend for lawsuits being filed when breaches impact fewer than 100,000 individuals continued to increase in 2020, which is driving up the data breach cost. HIPAA enforcement activity also continued at elevated levels, although in 2020 the majority of the financial penalties issued were for HIPAA Right of Access failures, rather than fines related to security breaches.

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