As the number of connected devices and computer networks grows, so does the number of cybercrimes. Phishing attacks account for 25% of all cyber breaches, with 85% involving the human element.
Most of these attacks could have been prevented simply by training employees to avoid suspicious emails, malicious links, and unexpected online requests for information.
The consequences of phishing attacks can be devasting. They can cost companies millions of dollars. While larger companies may survive such attacks, smaller businesses have a more challenging time rebounding.
Let’s take a closer look at what usually follows a successful phishing attack and how to avoid severe consequences.
What is a phishing attack?
A phishing attack is a cybercrime that involves fooling a person into sharing sensitive data and disclosing personal information. This attack often comes in the form of an email that contains an embedded link. An email seems to come from a credible organization, such as a financial institution. It provides a link that looks highly legit. However, that link redirects users to a criminal’s website.
Unknowingly, the user shares sensitive information, including:
- Name and other personal details
- Credit card number
- Logins and passwords
Anything they type into the informational fields of the fake website goes into the hands of criminals, who use it for various illegal purposes.
Social Engineering Attack
More than a third of phishing attacks involve social engineering. Social engineering is the process of convincing someone to do something. In the context of phishing attacks, social engineering tactics include fooling a person into sharing information.
The human element of the phishing attack makes this fraudulent activity highly preventable. Unfortunately, over 95% of people can’t identify a phishing attack. The lack of education and cybersecurity training, a common issue in companies of all sizes, makes it easy for cyber attackers to continue initiating phishing attempts.
Expected Consequences of Phishing Attacks
The extent of the phishing attack consequences depends on its purpose and the importance of the information obtained during the data breach. The most common problems that companies face include:
1. Business Disruption
Phishing scams that steal essential information could cause serious downtime for your company. By changing passwords and working through your data, criminals could cause chaos on your network.
If you lose access to your information and customer data, the downtime may take hours or even days. You need to recover passwords, use backup, re-enter information, etc. If you lose control of your data, it could cost your company’s reputation.
2. Financial Loss
A phishing scam can cause severe financial losses regardless of the company’s size. In 2021, phishing attacks will cost American companies $2.3 billion. These financial losses stem from downtime, fines, reputation revival costs, and recovery of trade secrets.
In some cases, these attacks are explicitly aimed at one person. Cybercriminals send phishing emails to a specific company executive, who is tricked into transferring company money to a criminal’s account.
Many organizations experience financial consequences long after the attack. For example, during a phishing attack, the criminal can install ransomware, which could cost your company millions of dollars.
Phishing campaigns can hurt the company’s reputation dramatically. By stealing logins and passwords, cybercriminals can gain access to sensitive information. If you are working with your customers’ personal information, data breaches like this could hurt your reputation.
If a cybercriminal uses this data for identity theft, credit card fraud, and other illegal activities, you could face lawsuits from your customers.
Meanwhile, the information about your vulnerability to these attacks is likely to get out. This discovery could cause you to lose loyal clients and start having problems with attracting new ones.
It could take years for the company to revive its reputation after a successful phishing attack. Some of them don’t survive such a severe business disruption.
4. New Attacks
Sometimes, email phishing attacks that don’t seem significant at first could be paving the way for new phishing scams. A series of minor phishing attacks could precede a major problem.
During these cyber attacks, the criminals could be installing malware, which can disrupt your business operation in the future. This malware could allow criminals to hurt your company on a much bigger scale than a simple attack.
If you aren’t using cybersecurity services or implementing in-house cybersecurity measures yet, a phishing attack is a great reason to start.
5. Company Value
When a phishing attack occurs, the company can lose its value in the eyes of investors. Some may not want to keep their money in the company, which is vulnerable to costly cyber attacks.
A phishing scam makes you lose customers or clients and hurts investor confidence. Your company value can go down. The efforts to bring it back up are likely to be costly and are not always practical or fast enough.
6. Fines and Legal Consequences
If a criminal steals sensitive customer data during the attack, you could be facing significant fines and even legal action.
For example, your cybersecurity measures should follow HIPAA requirements if you work with medical records. If the data breach occurs, it means that your efforts were insufficient. A violation like this could lead to fines.
Customers and organizations may decide to initiate legal action against your company for not being able to protect their data. Legal proceedings are likely to be time-consuming and costly.
Phishing attacks can have serious consequences for a company of any size. Your business can lose customers, investors, and reputation while struggling to stay afloat and battle financial losses.
Since the key to any phishing attack is the human factor, you can prevent them from happening by implementing robust cybersecurity measures. Your employees should learn to tell a phishing website, email, or link apart from a credible one. This extra verification can tremendously reduce the risk of a fraudulent attempt turning into a severe data breach.