Category: Breaches

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Cyber diligence: Study reveals cybersecurity concerns are becoming a critical factor in M&A due diligence
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The OAIC engages in more in-depth investigations and stronger exercise of its power
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Major privacy and security breaches confirmed this week: Westpac, the ANU and Princess Polly targeted
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PwC’s Enforcement Tracker finds a large increase in fines for privacy breaches in the UK
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Surveillance software targets WhatsApp users
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Scammers are becoming more tech-savvy according to the ACCC’s Targeting Scams report
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PROPOSAL TO INCREASE PENALTIES FOR PRIVACY BREACHES
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Ratings agency starting to factor in Cyber risk profile
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Cyber attacks becoming common place: Different industries, similar methods
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Bypassing the Castle Walls: Tactical Exploitation of America’s Vulnerable Grid

Cyber diligence: Study reveals cybersecurity concerns are becoming a critical factor in M&A due diligence

By Cameron Abbott and Rebecca Gill

Unreported data breaches have disrupted several major M&A deals in recent years, such as Marriott International’s merger with the Starwood hotel chain. The growing list of cautionary (and costly) tales appears to be making an impression in the M&A space, as a recent study of IT professionals and business executives by Forescout Technologies has found.

The study queried a total of 2,779 respondents from all over the world, and found that 93% of the respondents viewed cybersecurity evaluations as important to their companies’ M&A decision-making processes. Respondents also ranked a target company’s history of cybersecurity incidents as the second most important factor when performing due diligence on the business, following the company’s financial statements.

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The OAIC engages in more in-depth investigations and stronger exercise of its power

By Cameron Abbott, Rob Pulham and Jacqueline Patishman

Following two key data incidents concerning how the Commonwealth Bank of Australia (CBA) handled data, the OAIC has successfully taken court action binding the banking heavyweight to “substantially improve its privacy practices”.

As a quick summary of the incidents, the first incident involved the loss of magnetic storage tapes (which are used to print account statements). These contained historical customer data including customer statements of up to 20 million bank customers. In 2016, the CBA was unable to confirm that the two magnetic tapes were securely disposed of after the scheduled destruction by a supplier.

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Major privacy and security breaches confirmed this week: Westpac, the ANU and Princess Polly targeted

By Cameron Abbott, Allison Wallace and Rebecca Gill

It’s been a chilly start to winter for three Australian organisations, who’ve this week reported major privacy and security breaches.

Up to 100,000 Australians’ personal information has been exposed in a hack affecting Westpac Bank. Westpac confirmed on Monday that details of Australian bank customers (not just those of Westpac) were exposed in a cyberattack on real time payments platform PayID. The banking giant says it noted a high volume of PayID lookups in 2019 on a semi-daily basis, which was a result of attackers trying to guess phone numbers, which, if guessed correctly, would give them the name of the account holder to which the number is linked. Despite the hack, Westpac says that no customer bank account details were compromised as a result of this cyberattack. Nevertheless, experts warn that the details accessed could still be used to commit fraud.

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PwC’s Enforcement Tracker finds a large increase in fines for privacy breaches in the UK

By Cameron Abbott and Rebecca Gill

PwC’s UK Privacy & Security Enforcement Tracker has found that fines in the UK over data protection law violations totalled £6.5 million in 2018, a £2 million increase from 2017.

The Tracker analysed data protection enforcement actions by the UK Information Commissioner’s Office (ICO), including monetary fines, prosecutions and undertakings. The Tracker shows that the total sum of fines increased from 2017, but the number of ICO enforcements fell to 67 in 2018 from 91 in 2017.

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Surveillance software targets WhatsApp users

By Cameron Abbott, Rob Pulham and Michelle Aggromito

Unfortunately for all of us, Privacy Awareness Week doesn’t mean a chance to take a break from seemingly endless data breach notifications and social media vulnerabilities.

This week it’s WhatsApp’s turn, with reports that hackers, or as WhatsApp described as “an advanced cyber-actor”, have been able to remotely install surveillance software on phones and other devices of select targets, likely to be lawyers, journalists, activists and human rights defenders. The hackers were able to compromise the devices by using WhatsApp’s call function to ring the devices. The surveillance software was still installed even if the call was not picked up and the call reportedly would disappear from the compromised device’s call log. This means the malware could be installed without any action from the compromised user – and potentially without them even being able to determine that they had been compromised.

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Scammers are becoming more tech-savvy according to the ACCC’s Targeting Scams report

By Cameron Abbott and Rebecca Gill

Australian businesses and consumers were duped into paying scammers with nearly half a billion dollars in 2018 according to the ACCC’s Targeting Scams: Report of the ACCC on scam activity 2018 (Report). The Report also highlights the use of sophisticated technology by scammers.

According to the Report, the most financially harmful scam affecting Australian businesses was the ‘business email compromise’ (BEC) scam. This involved a scammer gaining access to a business’s entire email or IT system. The scammer would then impersonate the business and send emails to suppliers and customers of the business, advising changes to payment details.

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PROPOSAL TO INCREASE PENALTIES FOR PRIVACY BREACHES

By Cameron Abbott and Rebecca Gill

In light of concerns over how personal data is being used by social media platforms and tech companies, the Commonwealth Government has proposed amendments to the Privacy Act in order to more harshly penalise companies for privacy breaches. The new regime, which aims to update Australia’s privacy laws in line with increased social media use, will see tougher penalties for all entities that are subject to the Privacy Act, not just the headline companies like Google and Facebook.

The Commonwealth Government proposes to increase the penalties for serious or repeated breaches by such entities from $2.1 million to $10 million, or three times the value of any benefit obtained through the misuse of information, or 10 per cent of a company’s annual domestic turnover – whichever is the greater value.

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Ratings agency starting to factor in Cyber risk profile

By Cameron Abbott and Wendy Mansell

A recent report released by Moody’s Investors Services has shed some light on which business sectors are most at risk for cyberattacks.

After assessing 35 broad sectors it was concluded that banks, hospitals, security firms and market infrastructure providers face the highest risk. This was based on levels of vulnerability and the potential impact an attack would have.

The key determinative factor for these sectors is that they all rely strongly on technology and the vital role of confidential information in their operations.

The financial repercussions following a cyberattack in each of these sectors is extremely significant when considering the costs of insurance, penalties, consumer impact, potential litigation costs, R&D and technological impact to name a few.

The financial market is so high risk because of the financial and commercial data it holds and ever increasing fact that its services are being offered digitally, across multiple platforms i.e banking mobile/smart watch apps.

On a similar note because medical records are primarily collected and held in electronic form hospitals are very attractive to hackers given the sensitive nature of the data.

While the industries should not be a shock to the reader, it is important for participants in those industries and for suppliers to those participants to realise the risk profile that attaches to them and have procedures in place reflective of those risk levels.  How one manages these risks in now likely to have indirect cost implications when you see ratings agencies like Moody’s assessing these sorts of areas. 

Cyber attacks becoming common place: Different industries, similar methods

By Cameron Abbott and Ella Richards

Popular car manufacturer Toyota has been hit by a malicious attack rendering their employees completely unable to access their emails. It is unclear whether any customer or employee data has been accessed, and Toyota is going to extensive efforts to discover the origin of the attack.

Staff who are powering on despite their access restrictions have been told to use face-to-face, phone and text communication until the emailing system is back online. Can you imagine!

Although the central server system is inaccessible, dealerships are continuing to operate normally besides being able to provide customers with the date they’ll receive their exciting new car.

Additionally, Melbourne Heart Group was subject to a cyber attack which completely locked them out of their filing system. 15,000 files were scrambled and held for ransom after a cyber crime syndicate hacked into their server, blocked all access to files and demanded a cryptocurrency payment be made.

Melbourne Heart Group is based at Cabrini Hospital in Malvern, but the separation of their systems ensured that no Cabrini operations were affected. Even though a payment was made to decrypt their servers, information including patient details and sensitive medical records are yet to be recovered.

Payment in these situations is always troubling, dealing with faceless individuals, having to trade in cryptocurrencies in order to chart a course to the fastest resolution.

Bypassing the Castle Walls: Tactical Exploitation of America’s Vulnerable Grid

By Cameron Abbott, Max Evans and Wendy Mansell

A recent Wall Street Journal Report has detailed how America’s utility grid was hacked. The Department of Homeland Security has named Russia as responsible for the overwhelmingly complex and threatening campaign.

The scheme targeted energy companies affiliated with the government and was carried out in a sophisticated manner by initially focusing on small firms within the utility supply chain.

Early techniques involved planting malware on the websites of online publications likely to be read by employees of companies within the energy sector. The hackers would lace the online publications with malicious content allowing them to steal usernames, passwords and infiltrate company systems.

A number of small firms fell victim to these tactics giving the hackers broad access to company networks. Fake emails were subsequently sent out on behalf of the affected firms containing forged and malicious Dropbox links which captured usernames, passwords and other credentials. Further they used fake personas to send emails and pretended to be job seekers, by sending resumes containing tainted attachments to energy companies.

The hackers continued this technique of sending malware emails on behalf of firms until they reached the top of the supply chain. It was reported that on at least 8 occasions the hackers infiltrated companies who had access to the industrial control systems that run the grid.

An alarming aspect was the number of affected companies that remained oblivious of the penetration. The report is a useful description of the variety of methods used to tempt employees to expose their credentials. All too easy to do. These same techniques are regularly used by more pedestrian hackers. Two factor authentication and regular password resets remain measures to limit these threats but so many organisations do not use them.

We repeatedly counsel that employees are the last line of defence for your organisation. Circulating the Report may make an interesting read to remind them of the variety of ways they can be seduced to click an incorrect link.

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