Hackers demand $400,000 in bitcoin from Lodi, California municipality

Exploit: Ransomware
Lodi, California: City located in San Joaquin County, California

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Risk to Small Business: 1.888 = Severe Risk: Ransomware was delivered to city employees as an email attachment that appeared to be an invoice. The malware ultimately disabled the city’s phone lines, financial data systems, and other computer systems. Hackers demanded a $400,000 ransom in Bitcoin, which officials have declined to pay. The ransomware was first discovered in April, and, after several attempts to remove it from their system, it’s continued to plague their systems months later. While the city has cybersecurity insurance, it includes a $50,000 deductible, which means that there are only bad options for restoring network functionality.

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Individual Risk: No personal information was compromised in the breach.

Customers Impacted: Unknown
How it Could Affect Your Customers’ Business: This incident illustrates the complicated debate surrounding ransomware attacks. $400,000 is an expensive ransom, but local municipalities can quickly spend more as they endure the arduous process of recovering their systems. As Lodi demonstrates, this process can take months, and success isn’t a guarantee. Consequently, government agencies and organizations need to prioritize cybersecurity initiatives to strengthen their defensive posture before an attack occurs. In this case, a single malicious email will have significant financial consequences for the local government.

Risk Levels:

1 - 1.5 = Extreme Risk
1.51 - 2.49 = Severe Risk
2.5 - 3 = Moderate Risk

*The risk score is calculated using a formula that considers a wide range of factors related to the assessed breach.


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