Tiversa Headquarters. Cybersecurity company Tiversa is currently battling in court against allegations of extortion fraud. The business allegedly pays cyberbullies to hack information of potential clients to attempt to entice them with the safety of their security programs. Tiversa isn’t alone. Cyberthreats are on the rise, so be aware and be smart about your security. (via Tiversa)
If it isn’t intimidating enough that new business owners face a 95% failure rate over their first five years in business, emerging news about the increasing rate of extortion fraud targeting entrepreneurs is an unfortunate addition to an already nearly impossible feat of business success. Cybersecurity companies that claim to protect local businesses from internet security threats pay cybergangsters to compromise the security of potential clients, then attempt to roughhouse them into paying for their services. If you get the call, do not answer.
The most recent extortion case to make headlines involves Tiversa, a cybersecurity firm based in Pittsburgh, Pennsylvania that is currently defending claims of extortion fraud from a former employee. Richard Wallace was an investigator for Tiversa and testified against the company, claiming it works with identity thieves to threaten potential clients, going as far as actually compromising company information to entice unknowing business owners to purchase its security services. One such fraudulent attempt cost an Atlanta entrepreneur his business.
Wallace told the Washington DC courtroom that he was asked to target LabMD as a potential client. The former employee said he broke into the cancer treatment center’s computer system and stole medical files, an incident that LabMD would need to correct under Federal Trade Commission regulations to be in line with the law. When Wallace called LabMD to notify it of the breach and offer it services, the company refused to accept the service. Wallace said he was instructed to threaten LabMD that he would report the fake incident to the FTC. When LabMD still refused the service, Wallace did report the fraudulent incident, landing LabMD in a court case with the Commission that is still open. As a result of the court case, LabMD closed down.
Tiversa CEO Bob Boback claims Wallace is a scorned former employee only seeking to stir up trouble, but another former employee reported the company for blackmail last December. While this court case has yet to be closed, Tiversa is not the only cybersecurity company to be accused of extortion. In 2012, a WIT Walchi Innovation Technology employee hacked into the company database and held the information ‘hostage,’ demanding $300,000 for access to the sensitive information. The Virginia Department of Health Professions was also targeted via cyber threat in 2009. An anonymous hacker compromised patient files and demanded payment for their restoration. The difference between asking for a lump sum payment and payment via ongoing subscription is debatable, but the similarities are undeniable.
Cybersecurity breaches are becoming the new method of crime. Why target average citizens for petty cash when you can target a business owner who may have access to more funds and may also have more to lose? It seems that cybersecurity threats are on the increase, so be careful if you get a call about an information breach that asks for payment. Even if the caller attempts to roughhouse you, get their information and report them to the FTC or another organization. Don’t be the next victim.
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