Extortion rackets on the increase in the UK
26 August 2008
Commercial extortion is a growth industry in the UK according to Aon Crisis Management, a unit of the Lloyd’s broking firm. Between 2003 and 2006 there was an average of 23 cases reported each year. In 2007, the figure hit 40 and in the last 12 months there have been 67 recorded incidents, Aon warned businesses.
In reality, the number of blackmail incidents is likely to be much higher. There are no official figures, according to Aon, but they believe a substantial number of commercial extortion cases go unreported. Companies want to avoid publicity and potential damage to their brand or reputation. Many will pay extortion demands to try and get rid of the problem quickly, though this approach often doesn’t work: once an extortionist knows a firm will pay out they are likely to target that company again in the future.
Extortion can take many forms. Common tactics include the threat to contaminate a product, bring down an online trading platform, harm personnel, reveal proprietary information or release customer data, such as bank account details. Julian Priestley, executive director of Aon Crisis Management, warns that it isn’t possible to predict where an attack might come from or what sort of company is vulnerable to attack. “Extortionists may be extremists, an organised crime group, a disgruntled employee seeking retribution or even a competitor trying to gain a greater market share,” he explains. “Clearly there are high profile cases where a retailer, for example, is targeted by an extortionist for financial gain or where a pharmaceutical company is targeted by activists. In reality, extortion happens at a very ‘local’ level too.”
Priestley says that, unlike terrorists, extortionists are not looking for the CNN shock factor. “Extortion, whether carried out by a disgruntled former employee or an organised criminal, is often a discreet affair,” he told lloyds.com. “Unless it goes wrong.”
In response to the rapid rise in the number of commercial extortion cases in the UK, Aon has hired the former senior investigating officer for multinational extortion at the British police to head up a new extortion consulting team within Crisis Management. Sam Nicholls comes to Aon after 32 years police service during which time he became the National Coordinator of Operations for Domestic Extremism.
Nicholls advises businesses to put plans and procedures in place, and test their contents. “Forward planning is the key. Companies should identify a response team, involving the right people with the right skill sets, and ensure that all the predictable decisions are made before something happens. A live crisis makes a very poor learning environment, and the correct response can make the difference between successfully managing the threat and serious damage to your brand and reputation.”
A recent court case included a worker at a meat packing firm who faked photos claiming to show unhygienic working practices on the premises. The blackmailer demanded £11,770 from his employers. The court heard that the scam could have cost the firm £15 million as it considered making a product recall.
The internet is breeding its own form of extortionist. IT security experts are seeing increasingly sophisticated ‘ransomware’ circulating the web whereby companies are hit by a Trojan virus that scrambles their data and are then offered a decryption key in return for money.
Last updated on 26 Aug 2008
