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Report: Managed Service Providers Are New Frontier of Ransomware Attacks

Hackers are targeting IT service providers as a means of attacking dozens of organizations at once and potentially reaping bigger financial rewards.

Hackers are increasingly finding ways to target several organizations at once through attacking managed service providers (MSPs) that often provide IT services to small businesses. 


Several recent attacks targeted MSPs, including malware that paralyzed hundreds of dental clinics and an incident that temporarily affected services in 22 Texas cities and towns. The providers are widely used because local governments, clinics and other small organizations do not want to take on the cost of hiring their own IT staff and therefore outsource their needs to contractors. 


In turn, cybercriminals can target one service provider, particularly smaller ones with fewer resources and employees, and potentially reap the financial benefits from dozens of small businesses in one attack. ProPublica recently reported on the phenomenon as ransomware attacks continue to rise and have severe consequences for organizations. 


Read more: Multitude of Ransomware Attacks Cause Lawmakers to Take Notice


Hackers have largely preyed on MSPs that have weak passwords or do not use two-factor authentication. ProPublica also found that attackers have exploited issues with “remote monitoring and management” software that businesses and governments had downloaded to install systems updates. 


Remote management is often used to install updates and solve users’ problems right on their screens, but can also serve as “golden keys to immediately distribute ransomware,” said Kyle Hanslovan, the CEO of cybersecurity firm Huntress Labs.


“Just like how you’d want to push a patch at lightning speed, it turns out you can push out ransomware at lightning speed as well,” he told ProPublica. 


Cyber criminals have leverage over the MSPs because they often serve many companies and government agencies that contain sensitive information and need access to the data as soon as possible. The providers are more likely to pay ransoms because they are often small businesses themselves and cannot handle the influx of needs from dozens of clients that were paralyzed by the attack, according to Chris Bisnett, the chief architect at Huntress. 


‘It’s one thing if I have 50 computers that are ransomed and encrypted and I can fix them,” Bisnett said. “There’s no way I have time to go and do thousands of computers all at the same time when I’ve got all these customers calling and saying: ‘Hey, we can’t do any business, we’re losing money. We need to be back right now.’ So the likelihood of the MSP just saying, ‘Oh I can’t deal with this, let me just pay,’ goes up.”


The rapid growth of ransomware attacks does not seem to be slowing down any time soon, particularly as the insurance industry continues to incentivize hackers by paying the ransoms instead of doling out money for data recovery services. 


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