Modern-day piracy holds computer systems to ransom

The electronic key system at Romantik Seehotel Jaegerwirt was infiltrated on Jan 22, leaving guests locked out.
The electronic key system at Romantik Seehotel Jaegerwirt was infiltrated on Jan 22, leaving guests locked out.PHOTO: ROMANTIK SEEHOTEL JAEGERWIRT

Experts say ransomware attacks becoming more prevalent; hotels, schools and police among victims

VIENNA • The ransom demand arrived one recent morning by e-mail, after about a dozen guests were locked out of their rooms at the lakeside Alpine hotel in Austria.

The electronic key system at the picturesque Romantik Seehotel Jaegerwirt had been infiltrated, and the hotel was locked out of its own computer system, leaving guests stranded in the lobby, and causing confusion and panic.

"Good morning?" the e-mail received on Jan 22 began, according to the hotel's managing director, Mr Christoph Brandstaetter. It demanded a ransom of two bitcoins, or about US$1,800 (S$2,600), and warned that it would double if the hotel did not comply by the end of the day.

Mr Brandstaetter said the e-mail included details of a "bitcoin wallet" - the account in which to deposit the money - and ended with "Have a nice day!"

With the 111-year-old hotel brimming with skiers, hikers and vacationers paying about US$530 for a suite with a panoramic view and sauna, Mr Brandstaetter said he decided to cave in.

Guests had already complained that their electronic room keys were not working, and receptionists' efforts to create new ones proved futile. Bashing down the doors was not an option.

  • SURGE IN ATTACKS 

  • The United States Justice Department says ransomware attacks quadrupled last year to an average of 4,000 a day.

  • The Federal Bureau of Investigation says the costs to victims of such attacks rose to US$209 million (S$296 million) in the first three months of last year, compared with US$24 million throughout 2015.

  • The Institute for Critical Infrastructure Technology in Washington says ransomware threatened to "wreak havoc on America's critical infrastructure community", calling it the digital equivalent of a "centuries-old criminal tactic".
    NYTIMES

The reservation system for the hotel, about 90 minutes by car from Salzburg, Austria, was paralysed.

Security experts said the attack on the hotel appeared to be an example of an increasingly malicious and prevalent type of modern-day piracy. The weapon? A type of software known as ransomware.

The crime is simple. Victims receive an e-mail with a link or attachment that contains software that encrypts files on their computer and holds them hostage until they pay a ransom. Many of the hackers operate in Russia and Eastern Europe, according to police, and often demand a ransom in hard-to-trace bitcoin.

WIDESPREAD PROBLEM

Ransomware is becoming a pandemic. With the Internet, anything can be switched on and off, from computers to cameras to baby monitors.

MR TONY NEATE, a former British police officer who has investigated cybercrime for 15 years.

"Ransomware is becoming a pandemic. With the Internet, anything can be switched on and off, from computers to cameras to baby monitors," said Mr Tony Neate, a former British police officer who has investigated cybercrime for 15 years.

Still, he added, "hacking a hotel and locking people out of their rooms is a new line of attack".

Mr Neate, now chief executive of Get Safe Online, a government- backed security charity in Britain, said demands in ransomware schemes were usually low enough that victims would acquiesce. Hackers simply make dozens of attacks a day to be financially viable. He nevertheless counselled victims not to pay as it would only encourage more attacks, and that the funds used to pay the ransom would bankroll nefarious activity, including possibly terrorism. Hotels, he said, should guard against copycats by reinforcing digital security.

Other victims in Europe and the United States have included a municipality, companies, schools, law firms and even police departments. Last year, hospitals in California and Kentucky were targeted. One Los Angeles hospital paid more than US$17,000 to restore its computer network and all of its digital medical files.

Mr Brandstaetter said the Romantik Seehotel Jaegerwirt was considering replacing its electronic keys with old-fashioned door locks and keys. "The most secure way not to get hacked is to be offline," he said.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on February 01, 2017, with the headline 'Modern-day piracy holds computer systems to ransom'. Print Edition | Subscribe