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June 23, 2024 | If Hackers Can Shut Down 15,000 Car Dealerships, Is Your Bank Safe?

John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.

On the list of things that might disrupt our increasingly fragile financial system, cyberattacks have always been up there with pandemics, real estate busts, war, and inflation. But those other things have, in one form or another, been happening while cyber disruptions have been limited to small-time extortion and the occasional data breach.

That might have changed this past week when hackers shut down a big part of a major industry. Here’s a quick overview, courtesy of the Brave browser’s AI summarizer:

CDK Global, a leading provider of software to car dealerships in North America, was hit by a cyberattack, causing a shutdown of its systems and disrupting operations at over 15,000 dealerships across the United States. The attack, which began on Tuesday evening, was followed by a second attack on Wednesday evening, prompting the company to shut down its systems again.

Key Facts:

Affected Dealerships: Over 15,000 car dealerships in the United States, including those under General Motors, Group 1 Automotive, and Holman, were affected by the cyberattack.

CDK Global Systems: The company’s software, which includes CDK Service, Fortellis Integration Portal, Modern Retail CRM, and others, was impacted by the attack.

Scope of Outage: The cyberattack brought operations to a halt at dealerships, making it impossible for them to sell vehicles, manage payroll, inventory, and office operations.

Second Attack: A second attack on Wednesday evening forced CDK Global to shut down its systems again, prolonging the outage.

Investigation: CDK Global is actively investigating the source of the attack, but no public-facing comments have been made since Wednesday afternoon.

Impact: The cyberattack has caused significant disruptions to the automotive industry, with dealerships forced to resort to handwritten forms to continue operations.

And here’s a current news report on the hackers’ ransom demands and the victim’s intention to pay up:

CDK hackers demand millions to end cyberattack crippling auto dealers

(USA Today) – A group that says they hacked software company CDK Global is demanding tens of millions of dollars in ransom, Bloomberg reported.

CDK, which provides software to car dealerships in North America, intends to pay the ransom but discussions are subject to change, according to Bloomberg’s report which cited a person familiar with the situation.

The source said the group behind the hack is believed to be based in eastern Europe, Bloomberg reported.

An estimate of the financial losses:

Estimated dealership daily gross profit: $20,000

CDK impact: (50%) = $10,000 lost per day, per dealer

15,000 dealers x $10,000 x 3 days = $450,000,000 in lost profit.


Our Response?

First and foremost, it’s time to start treating cyberattacks like a legitimate risk, as or more likely going forward than the other risks mentioned above. So…

What happens if the next target is the banking system? The obvious response is to hold less cash in accounts with banks and brokers. Not none, but less. If you’re holding enough cash for two weeks of expenses, up it to four weeks. If you’ve got physical gold and silver equal to 10% of your net worth (and stored safely outside the banking system) up that to a higher percentage.

As for the power grid or local water system, take steps to become less reliant on them. Add solar panels to your roof, install battery backup, buy a wood stove for heat if the outage happens in winter, and set up a water capture/storage system (a post on that is in the pipeline here).

In other words, we’ve just been given a very good reason to turbocharge our prepping.

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June 23rd, 2024

Posted In: John Rubino Substack

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