Has W-2 fraud overtaken healthcare as the most lucrative target for cyber-criminals?

Michael Bruemmer, a vice president with the Experian Data Breach Resolution group, poses a question about whether W-2 fraud has become the most lucrative target for criminals when attacking the healthcare sector. But the data he points to – some of which is based on the work DataBreaches.net is doing with Steve Ragan of Salted Hash, is not specific to the healthcare sector:

Even with all the warnings and resources available, the United States continues to experience increasing incidences of companies and employees falling victim to phishing attacks during the 2017 season aimed at tricking companies’ HR departments into sending W-2 forms to criminals who can use the record to file fake returns, among other uses. The proliferation of this scam is so widespread that Experian is currently servicing dozens of breaches a week related to these schemes. So far, these schemes have already affected more than 29,500 people this year – a 25 percent increase from what Experian saw last year by this time.

Yes, W-2 fraud is all the rage these days. We’re up to about 60,000 people affected already – and that’s just for the one-third of the 100+ W-2 phishing cases where we have numbers, but what do the data show about the healthcare sector? Is there actually any public evidence to support the notion that criminals have shifted to going after W-2 data and not PHI or other types of PII in the healthcare sector?

Looking at our list of W-2 phishing victims that have been disclosed publicly, I see six involving healthcare entities: Campbell County Health (1400 employees affected), Point Coupee Hospital (200 employees affected), Adventist Health Tehachapi Valley (253 employees affected), SouthEast Alaska Regional Health Consortium, Citizens Memorial Hospital, and Meridian Health Services.

During the same two-month period, this site recorded more than one dozen hacks involving patient protected health information.

That doesn’t strike me as indicating any major shift by criminals to W-2 fraud, although there is no doubt that criminals do adapt and go for low-hanging fruit.

So I contacted Bruemmer to ask him whether they had data supporting any claim that criminals have actually shifted to W-2 data in the healthcare sector attacks. What I got back was a statement that didn’t answer the question:

Healthcare entities in general should be no more or no less susceptible to W2 theft; thieves typically exploit the path of least resistance. As noted in the article you referenced, the IRS issued a warning after identifying a 400 percent increase in phishing and malware incidents in the 2016 tax season when compared to the previous season. That said, of healthcare W-2 incidents serviced by Experian Data Breach Resolution, 35% have been the result of a phishing attack.

But are W-2 incidents the majority of incidents or the minority of incidents they handle for the healthcare sector? I didn’t get a clear answer, and they wouldn’t reveal numbers:

I believe the intent of the article was to pose the question, for consideration, of value versus volume — meaning, is W-2 fraud a better target for PII (by thieves’ standards)? The article suggests the increase in attacks aimed at obtaining the W-2 forms may support that position.

“May.” It would be nice if we had actual data.

Should healthcare entities take steps to educate their employees to avoid phishing attempts or clicking on links that might inject malware? Of course. But right now, W-2 phishing incidents are not outnumbering other types of attacks. Maybe in a few months as more data come in, we’ll have a better sense.

But frankly, when it comes to low-hanging fruit/easy targets for criminals, the public education sector (k-12) still strikes me as the most likely to be vulnerable or to become victimized.

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  1. Billy Reuben - March 6, 2017

    Great job following up and pursuing the truth. Separating fact from fiction is almost a lost art these days.

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