Cyber Extortion Definition

The "Legal-Ease" Glossary
Cyber Extortion

This is an online crime in which a hacker threatens to damage your business unless you pay a ransom.

Cyber extortionists may threaten to harm you, your reputation, or your property if you do not comply with their demands. Cyber extortion can take many forms. For example, the cybercriminal may use "ransomware" to encrypt your data, which means you can't read your data without the encryption key – and the cybercriminal will withhold this key until payment is made.

Today, distributed denial-of-service (DDoS) attacks are the bread and butter of cyber extortionists. This is an attack where…

  • A hacker overwhelms a target’s server with malicious traffic. Typically, the attacker will use a botnet (i.e., a network of infected computers) to generate a flood of traffic on the server.
  • The traffic sends more connection requests than a server can handle. Or, the botnet sends the target huge amounts of data to use up its bandwidth.
  • The target’s site is shut down. Believe it or not, some people pay extortionists to silence websites they don’t like. Shutting down a small site or keeping a small organization offline for a week can cost as little as $150.

If a business doesn’t meet the extortionist’s demands, the hacker could keep the site offline long enough to run the business into the ground. Or, the hacker may be able to remotely access control panels and start deleting files necessary to keep the site or business running.

So what’s at risk of being “held hostage” by cyber attackers? Any of your…

  • Websites.
  • Computer systems.
  • Severs.

The attackers will only cease and desist when their demands have been met. Because most small businesses operate with the help of computers, cyber extortion is a growing problem.

That’s why small-business owners should consider carrying first-party Cyber Liability Insurance. This coverage can help cover the cost of negotiating with cyber extortionists.

RETURN TO GLOSSARY