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FTC safeguards and cybersecurity Q&A with Proton dealership IT, NADA counsel, and Reynolds and Reynolds

Sponsored Content From Reynolds and Reynolds
This content was paid for by an advertiser and produced by the Automotive News Content Studio.
October 03, 2022 08:01 AM
Brought to you by Reynolds and Reynolds and Proton Dealership IT
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    Reynolds and Reynolds recently sat down with industry experts to discuss how changes to the FTC Safeguards rule will impact auto dealers. After talking through the risks of cyberattacks, the panel addressed the amendments and answered pressing questions from dealers. With the compliance deadline of December 9, 2022, it’s important to be educated on cybersecurity and prepared for the amendments to take place. With the compliance deadline of December 9, 2022, it’s important to be educated on cybersecurity and prepared fro the amendments to take place. To see the full Q&A sessions, visit https://www.reyrey.com/cp/safeguards-and-cybersecurity-event-live.


    FTC Safeguards and Cybersecurity Q&A

     

    Shawn Leibold: Well, good morning and welcome to our Q&A session on FTC Safeguards and cybersecurity. My name is Shawn Leibold. I'm director of Industry Relations here at Reynolds and Reynolds, and I'm joined by a panel of great industry experts. I want to start off with Brad Holton, founder of Proton Dealership IT. Thank you, Brad, for joining us this morning.

    Brad Holton: Thank you so much for having me.

    Shawn Leibold: Also joined by Nikhil Kalani. He's our chief information security officer here at Reynolds and Reynolds. And also graciously joining us via Zoom is Brad Miller, who's our chief regulatory counsel and digital affairs and privacy officer at NADA. So good morning, gentlemen, and thank you again for joining us. So my flip it to you, Brad. So from a proton site, I know you gave one example earlier about the TV truck pulling in. The dealer called you, can you walk us through what that process would look like in a traditional fashion?

    Brad Holton: We actually will kind of back up and say, okay, we got to call it on that one. I think it was a Monday morning, 7:38 a.m., and it was actually a dealer group that we had given a proposal to earlier that June. This was in December, I think. So we'd kind of been in touch with them and they called and said, okay, so that stuff you told us that could happen if we didn't completely get everything in place and overhaul. This is what you meant. And I said, Yeah, this is what we're talking about. So all we knew at that point was something was wrong. Not a single computer worked. All the servers, I mean, everything email was down, everything was down. So we got engaged around 7:30 and, you know, wake everybody up, get everybody go on, you know, and let's get the team going. So, you know, we sent guys to the to all the stores and tried to figure out, you know, as fast as we could what was going on. We were able to actually as we were cleaning things up, we were able to trace it back to see how it actually happened. And it had happened through that same email platform I mentioned earlier where a finance manager had gotten an email he thought came from the controller, clicked on it, saw a little thing pop up, didn't think much about a little bit, just a little rectangle popped up and then went away. That was it was on Thursday, about 4:35 when he clicked on that. And by 4:39 we were able to see that things had already been downloaded. His computer, they were already scanning and they already dumped all of his email, already dumped his passwords, all that sort of stuff. By Friday, we could see that it was reaching out to other computers, scanning the network once again, fully automated. Still, no, nobody was involved. You know, it had already kind of started to penetrate some of the servers. And then Saturday evening we were able to see in the logs notes that showed that people were actually logging in now from overseas.

    We knew it was Eastern Europe. Some of the tools they used had Russian alphabet in it. So we kind of had a pretty good idea who are hacker was. And then once we were able to see the file extensions, the way they encrypted things, we're able to actually drill right down. It was actually a group that was affiliated with the FSB in Russia, was called Grimm Spider was their online moniker. They went by and it was figured all that out but the dealer what he experienced from Monday morning until we'll call it Thursday he was pretty much not doing anything at all. So we overnighted, I think 200 PCs. We started wiping PCs that we could started locking down servers. He basically every single device they had had been encrypted. When I say encrypted, they actually encrypted the operating system itself, the user files. So when you tried to try to turn the computer on and log in, it would just air out. So nothing worked at all. All the servers were gone. Unfortunately, they did not have good backups out of all of their stuff. They might have had 10% backed up 15%, something like that. So we did lose a ton of data. Luckily, they did not exfiltrate data ahead of time, so we were able to go back and look through all the logs, look at the firewall logs, look at all the traffic going out. And we were able to determine that they did not package any data and exfiltrate it out in that case. So we didn't have that double extortion situation. We just had the initial extortion. We wound up destroying just basically everything and starting over. We lit a match, just rebuilt everything. It took about three weeks for them to be 100% operational. So by Thursday, we had, you know, maybe two PCs in each service drive, you know, one or two PCs in sales, one or two PCs in finance. We had each business function restored, but it was limping along. And even then it was very painful. You know, email had to be completely rebuilt from scratch. It was all gone. So, you know, it was just one thing after another. We had to put back together and we had to prioritize who was going to get what. And, you know, just simple things. You know, we think about like office, reloading office and all the PCs and then, you know, all the saved passwords you had on the PCs because everybody just put their passwords in Chrome. And, you know, it was just all these pain points that it took to get them back to work. It's a very long process.

    Nikhil Kalani: I'll add a little bit more to what Brad said here. You know, once an attack happens, now's the time where you can't afford to hesitate. And how are you going to respond to the fluency of response is needed. So working with a professional who's done this dozens and dozens or hundreds of times and has got the fluency in the tools, no hesitation. That's what's needed during an incident response. It's very difficult otherwise for a business to kind of figure this out. This is the first time I've ever seen this happen.

    Shawn Leibold: We've said that, you know, if a dealership has the right infrastructure, the right IT infrastructure in place, the cybersecurity pieces in place, you know, how could these attacks be mitigated if they can or can't they or I mean, they think they're good, right?

    About Reynolds

    Reynolds and Reynolds is one of the automotive industry’s leading providers of software, services, and document solutions to help automotive retailers improve business results and the customer experience. With 4,300 associates worldwide, Reynolds is headquartered in Dayton, Ohio, with major U.S. operations in Houston and College Station, Texas, and Celina, Ohio, as well as operations in Canada, the U.K., and across Europe. (www.reyrey.com)

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        • CDK Global: Shoppers make clear the service features they want
        • Capgemini: Unlocking the next turn in the mobility roadmap
        • Champ: The history of titling and the cost of human error
        • Cox: Automation and the future of automotive retail
        • Cox: Transformation toward eCommerce in automotive retailing
        • Cox: Transforming F&I for Automotive eCommerce
        • Deloitte: ACCELERATING DIVERSITY, EQUITY AND INCLUSION
        • Easycare: Reinventing the service contract for EVs
        • Easycare: The importance of benchmarking your reinsurance performance
        • Effectv: Why “Customer Lifetime Value” Should Be the Auto Advertising Buzz Word for 2023
        • Experian, GroundfTruth and Spectrum Reach: Dealership marketing: Navigating automotive advertising in a post-pandemic world
        • Experian: Evolving identity beyond the “who” to enable the “how”
        • Experian: Three steps to adapting to constant change in automotive marketing
        • Haig Partners: Buy-Sell Q&A: Where the Automotive M&A Market is heading
        • Haig: Buy-Sell Q&A | Navigating partial dealership sales
        • Haig: Buy-Sell Q&A: Future-proofing your dealership
        • Haig: Buy-Sell Q&A: What is the value of an M&A advisor?
        • JM&A Group, Easycare, Assurant: Unlocking new opportunities in F&I with digital retailing
        • Kerrigan Advisors: Interview with Baxter Auto Group
        • Kerrigan Advisors: Interview with Hitchcock Automotive
        • OEC: How to understand what customers are saying when they’re not saying it
        • PACE: Electrification Technology: Once the supply chain gets over the shock, EVs offer opportunities
        • Pace Program Navigating advanced driver-assistance systems
        • Phone Ninjas: 5 Reasons you need to use phone scripts for your dealership
        • REYNOLDS & REYNOLDS: Creating great retail customer experiences
        • REYNOLDS AND REYNOLDS: Are you ready for the FTC Safeguard Rule changes? Take this quiz to find out
        • Rey and Rey: Automation and the future of automotive retail
        • Siemens: The impact of vehicle electrification and connectivity on electrical system design
        • Spectrum Reach: Playing to win: How automotive dealers can capitalize on sports marketing
        • Swiss Re: Insurers and car manufacturers: how to unlock the potential of true collaboration
        • Text2Drive: Digital retailing meets the service department
        • Trimble: The future of autonomous vehicles speeds ahead
        • Truist: Capitalize on the changing structure of auto retailing
        • Truist: Prepare now for the next era of automotive retailing
        • Urban Science: Promoting dealer-consumer alignment across continued industry evolution
        • Walbridge: Video | Walbridge Chairman on how automotive companies are navigating the electrification boom
        • Western Digital: To Meet Consumer Demand, Automakers Must Double Down on Agile Development
        • Wipro: How to address safety and security for software-defined vehicles
        • Wipro: How today’s tech decisions drive tomorrow’s sales
        • Wipro: Software Helps Address the Affordability Challenge
        • Wipro: The Promise of Software-Defined Vehicles and the Cloud Car Ecosystem
        • Wipro: Video | Wipro CTO on how OEM's are leveraging software-defined vehicle technology
        • Notarize: What to expect for the future of auto sales
        • Seagate: Unlocking value from connected-car data
        • Amazon Web Services: AI-powered supply chain decision-making
        • Epic Games: Five ways in-car designs will change in the next five years
        • Haig Partners: How are dealerships being valued today?
        • Haig Partners: Dealership consolidation trends
        • Haig Partners: Dealership valuation trends
        • Haig Partners: Dealership succession planning
        • Ally: Navigating the future of automotive retailing
        • Google: How a century-old brand is transforming the auto industry
        • Car Wars: Is a Rise in Service Leading to Poor Customer Satisfaction?
        • Solera | DealerSocket: Four real-time integrations that can save your dealership time
        • Solera | DealerSocket: Time for a new pre-owned pricing tactic
        • Kerrigan Advisors: Blue Sky Update Q4 2021
        • Qualcomm: Trading multi-year design cycles for on-demand features and experiences
        • Twitter: EV adoption is happening...in an unexpected place
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