TalkTalk – could this be an extortion attack?

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Dido Harding, the chief executive of TalkTalk, has a firestorm on her hands.

Millions of her customers could have had their data - including bank details - stolen in what the company has described as a "concerted cyber-attack".

I am told that TalkTalk first started experiencing "latency" problems with its internet servers during the day on Wednesday.

That means information that should have been transferred easily between different parts of the business started slowing down.

TalkTalk shut down its website overnight as what is called a Distributed Denial of Service (DDoS) attack took hold.

I am told that attack "punched a lot of holes" in TalkTalk's systems and allowed the attackers to gain access to the customer data.

TalkTalk will have to reveal pretty quickly whether all that data was encrypted.

TalkTalk had earlier called in the police and its cyber-security provider - a major global company which I have been asked not to name.

It does not appear that TalkTalk knows whether the attack came from within Britain or abroad.

And of course in all situations like this, companies are dealing with groups that operate in the shadows and across national borders.

One thing it is worth noting at this early stage is that there have been a number of recent reports about groups attacking companies and subsequently demanded ransoms in Bitcoins.

One group is named DD4BC, which has been accused of emailing companies with demands to be paid.

It is as yet unclear whether TalkTalk has been the target of a similar attack, but I am told it is already a strong line of inquiry.

UPDATE 11:00

Following my earlier blog, I have been contacted by a number of companies which say there was a significant upsurge in Denial of Service (DDoS) attacks on Wednesday, the day TalkTalk was infiltrated.

Some appear to be connected with extortion, with ransoms demanded in Bitcoins.

This appears to be a far wider problem.

Even if it is part of a wider attack, it is still very bad news for TalkTalk, which has been dealing with high levels of customer complaints already about its service.

And it had two more minor data breaches earlier this year.

With Sky and BT much bigger providers, TalkTalk knows that this major infiltration by cyber-criminals is very serious.

Investors seem to agree. TalkTalk's share price is down nearly 10% this morning.