Germany sees rise in cybercrime, but reporting rates still low

BERLIN (Reuters) - Cybercrime is expanding at a rapid rate in Germany, one of the most digitally advanced countries in the world, but the vast majority of attacks against individuals and companies are not reported, government and industry executives said on Wednesday.

Markus Koths, head of the cyber crime unit at the German Federal Crime Office, told a conference that numbers of cybercrimes reported in 2016 nearly doubled to over 82,000, resulting in damages of over 51 million euros ($55.7 million).

But he said that number likely represented just a tenth of all such crimes, which some industry groups had said could range into the millions with damage estimates as high as 22.4 billion euros.

The biggest trend driving the increase was the area of “cybercrime as a service,” with growing numbers of hackers offering hacking services and malicious software on the hidden part of the Internet, or “dark net,” Koths said.

Cybercrime as a service “is the backbone of modern cybercrime,” he said.

Klaus Mittelbach, head of the ZVEI German Electrical and Electronic Manufacturers’ Association, said his trade group was hit last year by viruses known as “ransomware,” which encrypt data and demand payments for them to be unlocked.

Germany should set up a central emergency number for people affected by cyber attacks to encourage better reporting, he said, noting the group had not paid any ransom.

Many companies worried about dragging down their share price, or other consequences if they admitted they had been hit.

Koths said Germany’s federal cyber security agency estimated there were 560 million different malicious software programs in circulation, up from 440 million a year earlier.

Cyber crime was expected to continue growing given the huge increase in smart phones, industrial systems and household appliances, officials told the conference.

Holger Muench, president of the Federal Crime Office, said Germany needed to rapidly develop new skills to stay ahead of cyber criminals, and was already working to share more data and intelligence with law enforcement agencies in other countries.

Sandro Gaycken, director of the Digital Society Institute, said Germany was a big target for industrial espionage due to its high levels of technology and the wide array of potential targets among small to medium-sized businesses.

A recent study by the Center for Security and International Studies in the United States estimated that cyber crime ate up about 0.7 percent of global gross domestic product, but the rate for Germany was around 1.6 percent, he said.

“If that is right, it’s the worst form of crime that we have in Germany,” Gaythen said.

Reporting by Andrea Shalal; editing by John Stonestreet