The Anatomy of a Phishing Attack and How it Can Impact Your Business

Every day, thousands of employees worldwide fall victim to phishing schemes. The Anti-Phishing Working Group (APWG) recorded 1,097,811 cumulative phishing attacks in the second quarter of 2022, the worst quarter on record. From lost data and identity fraud to compromised security and stolen funds, the consequences can be disastrous. 

Phishing is the most prevalent form of attack employed by cybercriminals, with the FBI's Internet Crime Complaint Centre recording more phishing incidents than any other type of computer crime.

Whether you are a sole proprietor or a multinational corporation, the risk of falling for a phishing scheme is high, as criminals are becoming more cunning and convincing in their attempts. Far too many businesses are vulnerable to attacks because they are unaware of what to look out for.

Phishing Attacks at a Glance

Phishing is a form of social engineering that is used to obtain user information, login credentials, credit card numbers, and other sensitive data. The attacker impersonates a trusted entity to convince the victim to access an email or message. The victim is then duped into clicking on a malicious link, which installs malware and leads to a data breach.

The Slashnext State of Phishing Report 2022 analyzed billions of link-based URLs, attachments, and natural language messages in email, mobile and browser channels over six months in 2022 and found more than 255 million attacks —a 61% increase in the rate of phishing attacks compared to 2021.  

Not all phishing is the same, and understanding the differences can help you identify the source of the issue and protect yourself in the future. Each variety has similar characteristics: all attacks are financially motivated and endanger your company's digital health. The distinctions are in how the attack happens and the methods hackers use to infiltrate your network. 

Exploring the different types of phishing can better prepare you for their attack:

Deceptive Phishing 
The most prevalent type of phishing scam is deceptive phishing. In this scheme, fraudsters pose as a legitimate business in order to steal people's personal information or login credentials. Threats and a feeling of urgency are used in these emails to scare users into doing what the attackers want.

Spear Phishing 
In this scheme, fraudsters personalize their attack emails with the target's name, position, business, work phone number, and other information to fool the recipient into thinking they have a connection with the sender. However, the goal is the same as with deceptive phishing: trick the victim into clicking on a malicious URL or email attachment for them to give over their personal information. Given the amount of information required to craft a convincing attack attempt, it's no wonder that spear-phishing is prevalent on social media sites such as LinkedIn, where attackers can use multiple data sources to craft a targeted attack email.

Whaling 
Whaling is a highly targeted phishing attack that masquerades as a valid email and targets senior executives. Whaling is a type of digitally enabled social engineering fraud that encourages victims to perform a secondary action, such as initiating a wire transfer of funds. Whaling emails also commonly use the pretext of a busy CEO who wants an employee to do them a favor.

Vishing 
This form of phishing attack foregoes sending an email in favor of making a phone call. An attacker can launch a vishing campaign by emulating various organizations with a Voice over Internet Protocol (VoIP) server in order to steal confidential data and/or funds. According to the FBI, malicious actors used these tactics to increase their vishing efforts and target remote employees in 2020.

Smishing 
Vishing isn’t the only type of phishing that digital fraudsters can perpetrate using a phone. They can also engage in what is known as smishing. This technique employs malicious text messages to dupe users into clicking on a malicious link or handing over personal information.

Pharming 
This phishing technique employs cache poisoning against the domain name system (DNS), a naming system used by the Internet to transform alphabetical website names, such as "www.ups.com," to numerical IP addresses, allowing it to find and direct visitors to computer services and devices. 

What Are the Consequences to Your Business for Falling Victim to a Phishing Attack?

Financial Loss

One consistent outcome of every phishing incident in history has been financial loss. The first is the immediate loss of funds transferred by employees whom the hackers fooled. The second factor is the penalties for noncompliance imposed by regulatory organizations such as HIPAA, PCI, and PIPEDA, to name a few.

In the event of severe violations of data protection standards, these fines could go through the roof. Finally, the costs of investigating the breach and compensating the affected customers would further compound the company's financial losses.

A 2018 Internet Crimes Report by the FBI revealed that Business Email Compromise (BEC) attacks cost US businesses over $1.2 billion.

Damage to Reputation

Businesses frequently attempt to conceal the fact that they have been the victim of phishing attacks. The leading cause of this is reputational harm. Customers frequently choose companies they believe to be reliable and trustworthy. The disclosure of a breach will not only taint the brand's image, but it will also break that established confidence. Regaining customers' trust is a difficult task, and the value of a brand is closely related to its customer base. 

An exposed breach assault will also harm the company's image among investors. Cybersecurity is critical at every step of project development. As a result, when a business suffers a data and privacy breach, investor confidence suffers. A successful phishing attack could potentially sabotage hundreds of millions of dollars in market capitalization by causing harm to both customer and investor trust.

Investor and Consumer Confidence 

Reputational damage is one thing; losing investor and consumer confidence throws fuel on the fire. When investors and consumers lose confidence in a brand, they tend to shy away from supporting the company and purchase fewer items.

Investors have a moral obligation to prioritize cybersecurity initiatives at all stages of company growth. When Facebook's user data was compromised in 2018, the company's overall value fell by $36 billion.

In one of the most visible breaches, hackers stole the debit and credit card numbers of 40 million Target customers, and another 70 million had their confidential contact information compromised. The retailer's fallout was quick and dramatic, with the business spending tens of millions of dollars on legal fees, customer reimbursements, software updates, and other expenses. More than 140 lawsuits were made against the company, and profits fell by nearly half due to deteriorating customer trust.

Loss of data 

For modern businesses, data is crucial and is one of a company's most important assets. A phishing attack can result in losing access to this information or having it stolen, which can decrease your profits and your data capture having to restart from the beginning. 

Business Disruption

It is nearly impossible for a business to run exactly as it used to after a phishing attack, especially involving malicious bugs. Attacks involving malware usually take a while to rectify. Systems will have to be taken offline or shut down, which could substantially decrease productivity.

Interruption to businesses providing services like transportation, technology, waste disposal, and other critical infrastructure could cripple the economy significantly.

Telesystem Has the Cybersecurity Solutions You Need

Cybercriminals are only getting stronger and more sophisticated in their attacks. The first step in protecting your organization is making sure every person in the company understands that security everyone's responsibility. Any organization can stay steps ahead of cybercriminals with education, training, and employee involvement; these tools will allow organizations to quickly spot and react to cybercrime activity. Telesystem team has a full suite of security solutions to safeguard your business and its employees against cyberattacks.

Employee Security Awareness Training 

Employees are responsible for 92% of data breaches, and their errors can lead to devastating consequences for their organization. While most employees try their hardest to do their job in a secure manner, they usually come across a few security hiccups such as losing a password or forwarding the wrong email. Employees are human, and as long as humans are part of a process, there will be a chance for error.

As the leading cause of security breaches, Phishing attacks cost businesses an average of $3.86 million, and they impact company reputation, value, and business. One of the simplest ways to stand against these escalating threats is through Telesystem's comprehensive Security Awareness Training program.

Through comprehensive cybersecurity awareness training, we will educate your staff on risks such as spam, phishing, malware, ransomware, and social engineering. This training lowers the likelihood of common employee mistakes that give hackers access to valuable data, systems, and programs. Employees are your first line of defense, so educating them on security policies is a crucial step in ensuring the safety and long-term viability of your company.

Advanced Email Protection

Email cyberattacks are intended to take advantage of tired, overworked, or otherwise unobservant employees. With the influx of emails an employee sends and receives daily, in addition to their daily tasks, it can be quite easy to carelessly open an email that results in a cyberattack. 

Email protection is necessary for a productive and secure workforce. Advanced Email Protector by Telesystem guards against spam, email viruses, and malware, as well as other forms of frequently ignored email-based attacks. Simultaneously, it offers encryption and screening of outbound emails to ensure your staff is not mistakenly releasing any critical internal information, preventing potential data leaks.

A single employee can set in motion a chain of events leading to catastrophe. For example, an employee may receive an email stating they must update their Office 365 password, including a link to help them complete the task. The unsuspecting employee clicks on the link, taking them to a seemingly legitimate website with Microsoft's logo. The employee then inputs and changes their password. However, the email prompting the password change and the web page are forgeries, and the employee simply handed cybercriminals their login credentials. Our comprehensive email security program eliminates the time-consuming task of determining which emails may lead to data breaches. It allows employees to focus on their work without worrying about a potential cyber threat compromising the entire company, enabling the workforce to operate securely and with peace of mind.

When it comes to your company's security, there's no room for negligence

Many businesses and employees think "This would never happen to our company" or "No cybercriminal would try to come after our small business"—until they do. As cybercriminals become more sophisticated, they will target your workers when they are busy, tired, or simply not paying attention. In order to prevent cybercriminals from taking advantage of your workforce, you need the right security partner to help protect your business.

With Telesystem's cybersecurity solutions, which include education, training, protection, and employee engagement, any organization can get ahead of the threat. Our Security Awareness Training and Advanced Email Protection solutions, as well as the rest of our suite of cybersecurity solutions will allow your business to focus on daily tasks rather than be worried about the threat of a cyberattack looming over your company’s head.