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Blackbaud: Taking Responsibility with a Landmark $49.5 Million Settlement for Devastating Ransomware Data Breach

Blackbaud settles for $49.5 million after a devastating ransomware data breach. Learn about the implications and response.

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Blackbaud Reaches $49.5 Million Settlement for Ransomware Attack and Data Breach

Blackbaud

Cloud computing provider Blackbaud has reached a $49.5 million agreement with attorneys general from 49 U.S. states to settle a multi-state investigation regarding a ransomware attack and the resulting data breach that occurred in May 2020.

Blackbaud, a leading provider of software solutions for nonprofit organizations including charities, schools, and healthcare agencies, specializes in donor engagement and management of constituency data.

This data includes a wide array of sensitive information such as demographic details, Social Security numbers, driver’s license numbers, financial records, employment data, wealth information, donation histories, and protected health information.

In July 2020, Blackbaud disclosed a breach in which highly sensitive data belonging to over 13,000 Blackbaud business customers and their clients from the U.S., Canada, the U.K., and the Netherlands was compromised, impacting millions of individuals.

The attackers gained access to customers’ unencrypted banking information, login credentials, and social security numbers. Blackbaud ultimately complied with the attackers’ demand for ransom after being assured that all stolen data had been destroyed.

This week, Blackbaud has agreed to a $49.5 million settlement to address allegations of violating state consumer protection laws, breach-notification regulations, and the Health Insurance Portability and Accountability Act (HIPAA).

“Carelessness cannot justify the compromise of consumer data. Companies must be committed to safeguarding personal information, meeting consumers’ rightful expectations of data privacy and protection,” said Ohio Attorney General Dave Yost.

Settlement Requirements

As part of the settlement, Blackbaud is required to:

  • Implement and maintain a breach response plan
  • Provide appropriate assistance to its customers in the event of a breach
  • Report security incidents to its CEO and board and provide enhanced employee training
  • Implement personal information safeguards and controls, including total database encryption and dark web monitoring
  • Improve defenses through network segmentation, patch management, intrusion detection, firewalls, access controls, logging and monitoring, and penetration testing
  • Allow third-party assessments of its compliance with the settlement for seven years

Ransomware Attack Fallout

In its 2020 Q3 Quarterly report, the company revealed that at least 43 state Attorneys General and the District of Columbia were investigating the incident.

By November 2020, Blackbaud faced 23 proposed consumer class action cases related to the May 2020 security breach in the U.S. and Canada.

In March, the company agreed to pay $3 million to settle charges brought by the Securities and Exchange Commission (SEC), alleging that it had failed to disclose the full impact of the 2020 ransomware attack.

According to the SEC, Blackbaud’s technology and customer relations personnel discovered that the attackers had stolen donor bank account information and social security numbers. However, they failed to escalate the matter to management due to the company’s lack of appropriate disclosure controls and procedures.

Subsequently, Blackbaud submitted an SEC report omitting crucial details about the full scope of the breach. Additionally, the report downplayed the potential risk associated with sensitive donor information accessed by the attackers, describing it as hypothetical.


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Malware

23andMe Enhances User Agreement to Shield Against Data Breach Lawsuits

Genetic testing service 23andMe has updated its user agreement to avoid potential data breach lawsuits. Customers must now agree to resolve any legal disputes through arbitration and won’t be able to file class-action lawsuits. The move follows several high-profile data breaches that have led to costly legal settlements for companies.

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Genetic testing provider 23andMe is currently facing multiple lawsuits due to an October credential stuffing attack that resulted in the theft of customer data. In response, the company has made changes to its Terms of Use, making it more difficult for customers to sue them.

Last October, a cybercriminal attempted to sell 23andMe customer data but ultimately failed, leading them to leak the data of 1 million Ashkenazi Jews and 4.1 million people living in the United Kingdom.

Our IT Services team learned that the data was obtained through credential stuffing attacks used to breach customer accounts. The cybercriminals exploited a limited number of these accounts to access the ‘DNA Relatives’ feature and scrape the data of millions of individuals.

In a recent update, 23andMe disclosed that a total of 6.9 million people were affected by the breach — 5.5 million through the DNA Relatives feature and 1.4 million through the Family Tree feature.

Terms of Use Updates: Preventing Lawsuits?

As a result of the breach, 23andMe is now facing numerous lawsuits. In an effort to minimize legal troubles, the company updated its Terms of Use on November 30th. The updated terms now require mandatory arbitration for all disputes, prohibiting jury trials or class action lawsuits.

The updated Terms of Use state, “These terms of service contain a mandatory arbitration of disputes provision that requires the use of arbitration on an individual basis to resolve disputes in certain circumstances, rather than jury trials or class action lawsuits.”

23andMe sent emails to customers informing them of the change and advising that they had 30 days to notify the company at [email protected] if they disagreed with the new terms. Customers who disputed the update would remain on the previous Terms of Service.

However, Nancy Kim, a Chicago-Kent College of Law professor, told Axios that this change in the Terms of Use may not protect 23andMe from lawsuits. It could be difficult for the company to prove that they provided reasonable notice for customers to opt out of the new terms.

Stay Informed and Protect Your Data

As cyber threats continue to evolve, it’s more important than ever to stay informed and take proactive measures to safeguard your personal data. We’re here to help you navigate the ever-changing world of cybersecurity, providing you with the information and resources you need to stay safe online.

Contact us to learn more about how to protect yourself from cyber threats, and remember to come back regularly for the latest updates on cybersecurity developments.

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Malware

23andMe Revamps Terms of Use with Robust Measures to Thwart Data Breach Lawsuits

Discover how 23andMe has updated its Terms of Use to prevent data breach lawsuits, requiring users to agree to arbitration and waive their right to file a class action suit. Learn about the changes and how they affect customers’ legal rights in case of a data breach.

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A mountain range at sunset with sun rays shining through the clouds, captivating viewers with its breathtaking beauty.

Imagine getting a DNA test for fun or curiosity, only to have your sensitive genetic information stolen by cybercriminals. That’s exactly what happened to millions of 23andMe customers this past October. As a result, the genetic testing provider is now facing multiple lawsuits and has decided to change its Terms of Use to make it harder for people to sue the company. Let’s dive into the details and see what this means for you.

The Credential Stuffing Attack on 23andMe

In October, a malicious threat actor tried to sell 23andMe customer data. When they failed to find a buyer, they leaked the data of 1 million Ashkenazi Jews and 4.1 million people living in the United Kingdom. We found out from 23andMe that the data was obtained through a credential stuffing attack, wherein the criminals breached customer accounts using stolen login information. They then used the “DNA Relatives” feature to scrape the data of millions of individuals.

Since then, 23andMe has reported that a total of 6.9 million people were impacted by the breach – 5.5 million through the “DNA Relatives” feature and 1.4 million through the “Family Tree” feature.

23andMe’s Response: Updating Terms of Use to Prevent Lawsuits

As you can imagine, this massive breach has led to a flurry of lawsuits against the company. In response, 23andMe updated its Terms of Use on November 30th to include a provision requiring mandatory arbitration for all disputes, rather than allowing for jury trials or class action lawsuits.

The updated Terms of Use state, “These terms of service contain a mandatory arbitration of disputes provision that requires the use of arbitration on an individual basis to resolve disputes in certain circumstances, rather than jury trials or class action lawsuits.”

Users were informed of this change via email, and they had 30 days from the notification to disagree with the new terms by contacting 23andMe. Those who disputed the update would remain on the previous Terms of Service.

Will This Change Protect 23andMe from Lawsuits?

According to Nancy Kim, a professor at the Chicago-Kent College of Law, it’s unlikely that this change in the Terms of Use will protect 23andMe from lawsuits. She told Axios that it would be difficult for the company to prove they gave customers reasonable notice to opt out of the new terms.

What Does This Mean for You?

This situation serves as a reminder of the importance of cybersecurity and protecting your personal data. If you’ve used 23andMe or other genetic testing services, it’s crucial to stay informed about any potential breaches and take action to protect yourself.

And for those of us who aren’t directly affected, this case demonstrates the need for strong cybersecurity measures across all industries, especially when sensitive data is involved. As we continue to rely more and more on technology, the potential for breaches and cyberattacks only increases.

Stay informed and stay safe by keeping up with the latest cybersecurity news and best practices. We’re here to help you navigate the complex world of digital security, so don’t hesitate to reach out if you have any questions or concerns. Together, we can work to protect our data and our privacy.

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Malware

Austal USA, Navy Contractor, Confirms Devastating Cyberattack Following Massive Data Leak

US Navy contractor Austal USA has confirmed a cyberattack after sensitive data was leaked online. The defense shipbuilder is working with the FBI and local authorities to investigate the incident, which has not affected any government projects. The breach highlights the need for increased cybersecurity measures in the defense sector.

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A laptop with a padlock on it against a blue background, emphasizing the importance of cybersecurity in the Navy Contractor's defense against potential devastating cyberattacks.

Austal USA Suffers Cyberattack: What We Know

Austal USA, a shipbuilding company and contractor for the U.S. Department of Defense (DoD) and the Department of Homeland Security (DHS), recently confirmed a cyberattack against it. As a company that specializes in high-performance aluminum vessels, Austal USA plays a critical role in U.S. national security. Its American subsidiary is responsible for building the Independence class littoral combat ships for the U.S. Navy, which cost $360 million per unit, as well as an active $3.3 billion contract for constructing 11 patrol cutters for the U.S. Coast Guard.

Hunters International Ransomware Group Takes Credit

The Hunters International ransomware and data extortion group claimed responsibility for the breach, even leaking some information as proof of the intrusion. In response, a spokesperson for Austal USA confirmed the attack and stated that the company acted swiftly to mitigate the incident:

Austal USA recently discovered a data incident. We were able to quickly mitigate the incident resulting in no impact on operations.

Regulatory authorities, including the Federal Bureau of Investigation (FBI) and Naval Criminal Investigative Service (NCIS) were promptly informed and remain involved in investigating the cause of the situation and the extent of information that was accessed.

No personal or classified information was accessed or taken by the threat actor. We are working closely with the appropriate authorities and will continue to inform any stakeholders impacted by the incident as we learn new information.

Austal USA recognizes the seriousness of this event and the special responsibility we have as a DoD and DHS contractor. Our assessment is on-going as we seek to fully understand this incident so that we can prevent a similar occurrence.

The Threat of More Data Leaks

Hunters International has threatened to publish more stolen data from Austal’s systems in the coming days, including compliance documents, recruiting information, finance details, certifications, and engineering data. Austal USA has not disclosed whether the threat actor accessed engineering schematics or other proprietary U.S. Navy technology.

Who Are Hunters International?

Hunters International emerged recently as a ransomware-as-a-service (RaaS) operation and is suspected to be a rebrand of the Hive ransomware gang due to overlaps in their malware code. The group denies these allegations, claiming they are a new operation that purchased the encryptor source code from the now-defunct Hive. They say that encryption is not their end goal, but rather stealing data and using it as leverage to extort victims into paying ransoms. Currently, the gang’s data leak site lists over a dozen victims from various sectors and regions worldwide.

A Call to Action: Protect Your Data and Stay Informed

This incident highlights the importance of staying informed about cybersecurity threats and taking steps to protect your data. We at IT Services encourage you to keep coming back to learn more about the latest cyberattacks and how to safeguard your information. Don’t hesitate to contact us if you have questions or need assistance in fortifying your digital defenses.

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