Ransomware: Your Computer Held Hostage

It’s called “ransomware,” and hackers use it to freeze your computer and scare you into paying big bucks to retrieve your files and passwords.

By Vicky Nguyen and Mark Villarreal
|  Monday, Oct 1, 2012  |  Updated 12:55 PM CDT
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Your turn on the computer and there it is: a notice that says it has been frozen because of child porn and unless you pay up, you'll be prosecuted. It's called ransomware and hackers are making a forturn from it. Vicky Nguyen reports. This video originally aired at 11 p.m. on Sept. 28.

Your turn on the computer and there it is: a notice that says it has been frozen because of child porn and unless you pay up, you'll be prosecuted. It's called ransomware and hackers are making a forturn from it. Vicky Nguyen reports. This video originally aired at 11 p.m. on Sept. 28.

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You turn on your computer and there it is: a message on your screen saying your computer has been frozen, and unless you pay up, you’ll be prosecuted by the FBI. It’s called "ransomware," and hackers are making a fortune from it.

“A screen flashed up with a warning that says you have no access to your server,” said Steve Merrifield, owner of Demo Ski in San Rafael, Calif. Merrifield says hackers took his computer system hostage, slowing sales to a crawl. “We have hijacked the files, changed the file extensions. We’ve changed your passwords. There’s no possibility of accessing this data,” said Merrifield.

But the crooks offered him two options: either spend years trying to decode their hack, or regain control, for a price. “You can pay us this ransom starting with $3,000 immediately and $1,000 for every week…that you fail to comply,” Merrifield said.

It’s a highly lucrative scheme, according to Gary Davis of computer security firm McAfee. “We’re seeing a dramatic increase in ransomware. It’s very profitable. These folks can make $50,000 to $60,000 a day just by hitting a couple countries.”

Davis said the scheme is successful because often the ransom note looks like an official notice from the FBI, accusing you of a crime, and demanding a payment to the Department of Justice. “They try to scare you [saying] ‘You have inappropriate content, you’ve stolen content, you have child pornography on your machine, and that scares people even if they’ve never done it,” Davis said. “That’s why they pay.”

Davis said you should never pay a ransom. Even if you do regain access to your computer, the hackers have probably dropped other viruses onto your system.

Ransomware hacks have grown so quickly, the FBI just posted this warning  on its Internet crimes website.

Davis said computers typically pick up the ransomware when users go to risky websites and click on links that appear to go nowhere, but secretly download malware to the user’s computer.
The best way to avoid being infected by ransomware, according to Davis, is to use the same rule of thumb that applies to so many things in life. “If it’s a place you probably shouldn’t be, you may not want to go there.”

Free programs, like McAfee’s Site Advisor, can help you figure out which sites are safe and which are risky. The program alerts you when you’re about to go onto an Internet site that may be a hacker’s playground.

Merrifield said he doesn’t know how his computer was infected, but his employees are instructed not to surf questionable sites at work. He is now moving his shop information to cloud computing to prevent another attack. He said no customer or financial data was breached, but the ransomware hack has cost him valuable time and money.

“I’ve also learned to back up my data a lot more often,”  Merrifield said.
 

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