Rackspace hit by phishing and ransomware attacks

Leading cloud computing company under fire

A cloud computing company encountered several security issues and the customers are not happy

Rackspace^[1] is a leading provider of cloud computing and managed hosting services founded in 1998. The company offers a range of services, including managed hosting, private cloud, and public cloud, that help organizations of all sizes to build, manage, and scale their IT infrastructure.

The company has a global network of data centers and offers a range of services that are designed to help organizations quickly and easily deploy and manage their IT infrastructure. As with any provider of cloud computing and managed hosting services, Rackspace is subject to a variety of security risks and challenges. These can include external threats such as hacking and cyberattacks.

The recent Rackspace ransomware attack reveals the cloud’s vulnerability. The ransomware attack was followed by a phishing attack and many customers are angry, even filing a lawsuit against the company. Many think that the company handled the security issues badly and did not keep the customers informed about the risks.

Rackspace warns customers about a security breach

Following a ransomware attack on its hosted Microsoft Exchange environment, cloud computing provider Rackspace warned customers of increased risks of phishing attacks. The company is still in the process of investigating the extent of the damage done, but they have warned that opportunistic cybercriminals might try to exploit this for their own gain. Rackspace said:^[2]

If you do receive a message from an individual you do not recognize, do not reply. Please login to your control panel and create a ticket, including details about the message you received,

Though the company has yet to confirm if any data was stolen from its systems during the breach, customers were advised to remain vigilant and monitor their credit reports and banking account statements for suspicious activity. Many customers have reported an influx of phishing emails attempting to take advantage of the ransomware attack. Rackspace customers who have been affected by the attack, should not open any email attachments or click on any links that seem strange or out of place.

Since Friday evening, Rackspace has been providing its customers affected by the outage with Microsoft Exchange Plan 1 licenses and detailed info on how to migrate to Microsoft 365. There is also a forwarding option available that automatically routes all mail sent to a Hosted Exchange user to an external email address as a temporary solution during the migration process.

Several class-action lawsuits filed against Rackspace

To mitigate these risks and ensure the security of its services, Rackspace has a number of security measures and protocols.^[3] These include physical security measures, such as surveillance and access control, as well as technological measures, such as firewalls and intrusion detection systems.

In addition, Rackspace has a team of security experts who are responsible for monitoring and managing the security of the company's network and systems. This team is available 24/7 to respond to security incidents and help customers with any security-related issues they may have.

It is important to note that no system is completely secure and there is always a risk of security breaches or incidents. Despite these measures, Rackspace is being sued by customers for failing to disclose that the Hosted Exchange security incident was actually a ransomware attack. They are also accused of not taking adequate measures to protect customer data, and for the negative impact the email service outage had on businesses using their service.

This class-action lawsuit^[4] is seeking over $5 million in damages and states that there are more than 100 members of the proposed class. Rackspace chose not to comment on the lawsuit.