Ransomware payments increase 500% in the last year, study shows

By Puja Sharma

The rate of ransomware attacks falls slightly, but recovery costs hit $2.73 million

Sophos, a global leader in innovative security solutions that defeat cyberattacks, released its annual “State of Ransomware 2024” survey report, which found that the average ransom payment has increased 500% in the last year. Organisations that paid the ransom reported an average payment of $2 million, up from $400,000 in 2023. However, ransoms are just one part of the cost. Excluding ransoms, the survey found the average price of recovery reached $2.73 million, an increase of almost $1 million since the $1.82 million that Sophos reported in 2023.

Despite the soaring ransoms, this year’s survey indicates a slight reduction in the rate of ransomware attacks, with 59% of organisations being hit, compared with 66% in 2023. While the propensity to be hit by ransomware increases with revenue, even the most minor organizations (less than $10 million in revenue) are still regularly targeted, with just under half (47%) hit by ransomware in the last year.

The 2024 report also found that 63% of ransom demands were for $1 million or more, with 30% of demands for over $5 million, suggesting ransomware operators are seeking huge payoffs. Unfortunately, these increased ransom amounts are not just for the highest-revenue organisations surveyed. Nearly half (46%) of organisations with revenue of less than $50 million received a seven-figure ransom demand in the last year.

“We must not let the slight dip in attack rates give us a sense of complacency. Ransomware attacks are still the most dominant threat today and are fueling the cybercrime economy. Without ransomware, we would not see the same variety and volume of precursor threats and services that feed into these attacks. The skyrocketing costs of ransomware attacks belie the fact that this is an equal-opportunity crime. The ransomware landscape offers something for every cybercriminal, regardless of skill. While some groups are focused on multi-million-dollar ransoms, others settle for lower sums by making it up in volume,” said John Shier, field CTO, Sophos.

For the second year running, exploited vulnerabilities were the most commonly identified root cause of an attack, impacting 32% of organisations. This was closely followed by compromised credentials (29%) and malicious email (23%).  This is directly in line with recent, in-the-field incident response findings from Sophos’ most recent Active Adversary report.

Victims where the attack started with exploited vulnerabilities reported the most severe impact on their organization, with a higher rate of backup compromise (75%), data encryption (67%) and the propensity to pay the ransom (71%) than when attacks started with compromised credentials. The surveyed organizations also had considerably greater financial and operational impact, with the average recovery cost sitting at $3.58 million compared with $2.58 million when an attack started with compromised credentials and a greater proportion of attacked organizations taking more than a month to recover.

“Managing risk is at the core of what we do as defenders. The two most common root causes of ransomware attacks, exploited vulnerabilities and compromised credentials, are preventable, yet still plague too many organizations. Businesses need to critically assess their levels of exposure to these root causes and address them immediately. In a defensive environment where resources are scarce, it’s time organizations impose costs on the attackers, as well. Only by raising the bar on what’s required to breach networks can organizations hope to maximize their defensive spend,” said Shier.

Key findings:

• Less than one quarter (24%) of those that pay the ransom hand over the amount originally requested, and 44% of respondents reported paying less than the original demand
• The average ransom payment came in at 94% of the initial ransom demand
• In more than four-fifths (82%) of cases funding for the ransom came from multiple sources. Overall, 40% of total ransom funding came from the organizations themselves and 23% from insurance providers
• 94% of organizations hit by ransomware in the past year said that the cybercriminals attempted to compromise their backups during the attack, rising to 99% in both state and local government. In 57% of instances, backup compromise attempts were successful
• In 32% of incidents where data was encrypted, data was also stolen – a slight lift from last year’s 30% – increasing attackers’ ability to extort money from their victims