Hackers demand millions, halt operations at 15,000 US car dealerships

Jun 24, 2024

Karah Rucker Anchor

By Karah Rucker (Anchor), William Jackson (Producer), Emma Stoltzfus (Video Editor)

A cyberattack on Wednesday, June 19, impacted CDK Global, a major software provider for North American car dealerships. The attack caused widespread disruption, halting management tools at thousands of dealerships. The hackers, believed to be based in Eastern Europe, demanded tens of millions of dollars in ransom.

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The attack affected approximately 15,000 dealerships, disrupting an industry that generates over $1.2 trillion in annual sales. The outage occurred during a critical end-of-quarter sales push.

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Although CDK briefly restored its systems, a second wave of attacks led to another shutdown.

The company warned that full recovery could take days, during which dealerships have had to revert to manual operations, slowing down sales, halting repairs and delaying deliveries.

The breach not only caused “operational chaos” but also led to a substantial ransom demand, which CDK is reportedly considering paying. Meanwhile, scammers have exploited the situation by posing as CDK representatives to deceive customers.

“CDK associates are not contacting customers for access to their environment or systems,” CDK Global said in a statement. “Please only respond to known CDK employees and communications.”

After decades of consolidation, the industry heavily relies on a few key players like CDK for essential management services, ranging from arranging financing and insurance to managing inventory and processing sales and repairs.

According to the National Automobile Dealers Association, there are approximately 16,800 new car dealerships in the United States.

Tags: Cyber attack, data breach, Hackers, ransomware, Retail Sales, Used cars

[KARAH RUCKER]

LAST WEEK A KEY SOFTWARE PROVIDER FOR NORTH AMERICAN CAR DEALERSHIPS BROUGHT THOUSANDS OF CAR DEALERSHIPS MANAGEMENT TOOLS TO A SCREECHING HALT, TRIGGERING WIDESPREAD DISRUPTION.

THE HACKERS, BELIEVED TO BE BASED IN EASTERN EUROPE, ARE DEMANDING TENS OF MILLIONS OF DOLLARS IN RANSOM.

THE ATTACK ON “CDK GLOBAL” IMPACTED ROUGHLY 15-THOUSAND DEALERSHIPS.

SEVERELY DISRUPTING AN INDUSTRY THAT ACCOUNTS FOR OVER $1.2 TRILLION IN ANNUAL SALES.

THIS OUTAGE HIT AT A PARTICULARLY BAD TIME FOR DEALERS — RIGHT DURING A CRUCIAL PUSH FOR END-OF-QUARTER SALES.

DESPITE A BRIEF RESTORATION OF THEIR SYSTEMS, “CDK” FACED A SECOND WAVE OF ATTACKS, LEADING TO ANOTHER SHUTDOWN.

THE COMPANY HAS WARNED THAT FULL RECOVERY COULD TAKE DAYS, DURING WHICH DEALERSHIPS REVERTED TO MANUAL OPERATIONS—

SLOWING DOWN SALES, HALTING REPAIRS, AND DELAYING DELIVERIES.

THE BREACH NOT ONLY CAUSED “OPERATIONAL CHAOS” BUT ALSO LED TO A SUBSTANTIAL RANSOM DEMAND, WHICH CDK IS REPORTEDLY CONSIDERING PAYING.

AMIDST THIS TURMOIL, SCAMMERS HAVE EXPLOITED THE SITUATION, POSING AS “CDK REPRESENTATIVES” TO DECEIVE CUSTOMERS.”

IN A STATEMENT THE COMPANY WROTE:

“CDK associates are not contacting customers for access to their environment or systems. Please only respond to known CDK employees and communications.”

AFTER DECADES OF CONSOLIDATION, THE INDUSTRY RELIES HEAVILY ON A FEW PLAYERS LIKE CDK FOR ESSENTIAL MANAGEMENT SERVICES. THESE RANGE FROM ARRANGING FINANCING AND INSURANCE TO MANAGING INVENTORY AND PROCESSING SALES AND REPAIRS, MAKING THE VENDOR’S ROLE CRUCIAL IN DAILY OPERATIONS.

ACCORDING TO THE MOST RECENT DATA AVAILABLE FROM “THE NATIONAL AUTOMOBILE DEALERS ASSOCIATION” THERE ARE ROUGHLY 16-THOUSAND 8-HUNDRED NEW CAR DEALERSHIPS IN THE UNITED STATES.

I’M KARAH RUCKER.

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