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How does Ransomware Work?


Until recently, it was thought that large-scale cybersecurity attacks would only hit big entities like technology firms, financial institutions or government agencies. But times have changed. In the last few years, especially since the pandemic, ransomware attacks are on the rise. No organization seems immune. Cyberattacks have resulted in incidents ranging from shortages in beef supply to fuel supply disruptions. The ensuing financial damages and crippled public services have resulted in chaos and lingering worries concerning who is next.

Canada alone recorded 4,257 ransomware victims in 2020, resulting in a total estimated financial loss of $659 million. The threat of ransomware attacks has reached a level where it has forced, for the first time, the United States government to treat ransomware hacks on par with terrorist attacks.

So, how does ransomware work? What makes it so devastating for victims? How can it be a serious national security threat? The experts at Packetlabs break down how this cyber nuisance functions and what you can do to protect your organization.

How does ransomware work?

Ransomware is a type of malware that encrypts all or selective files in a system it has infected. The cybercriminal behind the malware attack then demands a ransom amount from the victim to decrypt the files and give access back to the owner. Most commonly, the attackers demand the ransom amount in cryptocurrency because blockchain transactions are difficult to trace. Cryptocurrency transactions allow attackers to get away relatively quickly and remain untraced. Generally, the attackers demand ransom payments within a specific time. Failure to comply usually results in permanent data loss or massive information leaks for the victim. Even in some high-profile cases, the victims have ended up succumbing to blackmail tactics. Thus the vicious cycle continues. Read more in this blog about how we at Packetlabs do not recommend paying ransoms.

The below is a step-by-step process of how ransomware infects a computer and how a ransomware attack works.

1. Phishing attacks are the most common methods of deploying ransomware 

Here’s how ransomware works: Typically, a malicious email designed to appear like an email from a known and trusted source is sent out to the mail IDs of potential victims. This email would contain a download link to a server containing the malware. This link looks genuine and offers something the potential victim may need. If a victim ends up clicking the bait link (considered a successful phish), the click initiates a malware download. This download is the first step in the ransomware attack process.

A cybercriminal can install ransomware by gaining access to the victim’s computer. The cybercriminal acquires this illicit access using a compromised password or through remote desktop software such as TeamViewer. In other cases, a cybercriminal may exploit a vulnerability in the system to compromise it.

2. File encryption is the next step in the process

Once the malware is installed on a system, it goes about encrypting selective files in the system. This encryption involves using the system’s built-in functionality to replace the existing encryption keys with ones used by the cybercriminal. Typically, the attacker similarly encrypts files in other systems and data storage units connected to the compromised system.

More sophisticated ransomware will also get rid of any data backups it comes across and system recovery files to prevent the victim from recovering their files without decryption.

3. The cybercriminal demands a ransom amount to decrypt your files

The final step in a successful ransomware attack is the demand for ransom from a victim. This demand is usually posted on the desktop of the victim’s computer. The victim would have to pay the demanded ransom amount within a set time to regain system access. The posted demand would also provide information on how and in what form the victim should pay the ransom.

Once the victim pays the ransom, the attacker gives the victim the encryption key necessary to decrypt the files using a decryption program. The attacker may inform the victim on how to decrypt the compromised files.

However, there is no guarantee that cybercriminals will honour the victim’s commitment. The cybercriminal may even leak or sell information that is vital to the victim.

While this is a brief on how ransomware works typically, there may be specific ransomware attacks that vary slightly.

Staying informed can protect your business

It is essential to know how ransomware works. This knowledge is the first step towards prevention. Staying informed is especially important for smaller businesses that may not have the resources to invest in software to counter sophisticated phishing attacks. Creating data backups is still one of the best ways to keep yourself protected from ransomware hacks. 

The drive storing backup data should be disconnected at the end of every backup session. Isolating this drive from the compromised system will protect backup data against a ransomware attack.

Now that you know how a ransomware attack works we suggest simple and straightforward steps to prevent expensive ransomware attacks.

Getting your system or application checked by an ethical hacker for vulnerabilities could make all the difference in the fight against ransomware attacks. At PacketLabs, we provide professional penetration testing services to uncover vulnerabilities industry standards overlook. For more information on how our services can make your organization more secure, write to us at or request a free quote.