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Isracard used a single cell phone to communicate with credit card clients, and receive documents via WhatsApp. An employee stole the phone. He reformatted the phone and replaced the SIM card, which was oddly the best possible outcome, given the circumstances. Using the data to steal money would have been much worse.
Here’s a link to an archived version.
SIM hijacking—or SIM swapping—is an attack where a fraudster contacts your cell phone provider and convinces them to switch your account to a phone that they control. Since your smartphone often serves as a security measure or backup verification system, this allows the fraudster to take over other accounts of yours. Sometimes this involves people inside the phone companies.
Phone companies have added security measures since this attack became popular and public, but a new study (news article) shows that the measures aren’t helping:
We examined the authentication procedures used by five pre-paid wireless carriers when a customer attempted to change their SIM card. These procedures are an important line of defense against attackers who seek to hijack victims’ phone numbers by posing as the victim and calling the carrier to request that service be transferred to a SIM card the attacker possesses. We found that all five carriers used insecure authentication challenges that could be easily subverted by attackers.We also found that attackers generally only needed to target the most vulnerable authentication challenges, because the rest could be bypassed.
It’s a classic security vs. usability trade-off. The phone companies want to provide easy customer service for their legitimate customers, and that system is what’s being exploited by the SIM hijackers. Companies could make the fraud harder, but it would necessarily also make it harder for legitimate customers to modify their accounts.
This article outlines two different types of international phone fraud. The first can happen when you call an expensive country like Cuba:
My phone call never actually made it to Cuba. The fraudsters make money because the last carrier simply pretends that it connected to Cuba when it actually connected me to the audiobook recording. So it charges Cuban rates to the previous carrier, which charges the preceding carrier, which charges the preceding carrier, and the costs flow upstream to my telecom carrier. The fraudsters siphoning money from the telecommunications system could be anywhere in the world.
The second happens when phones are forced to dial international premium-rate numbers:
The crime ring wasn’t interested in reselling the actual [stolen] phone hardware so much as exploiting the SIM cards. By using all the phones to call international premium numbers, similar to 900 numbers in the U.S. that charge extra, they were making hundreds of thousands of dollars. Elsewhere—Pakistan and the Philippines being two common locations—organized crime rings have hacked into phone systems to get those phones to constantly dial either international premium numbers or high-rate countries like Cuba, Latvia, or Somalia.
Why is this kind of thing so hard to stop?
Stamping out international revenue share fraud is a collective action problem. “The only way to prevent IRFS fraud is to stop the money. If everyone agrees, if no one pays for IRFS, that disrupts it,” says Yates. That would mean, for example, the second-to-last carrier would refuse to pay the last carrier that routed my call to the audiobooks and the third-to-last would refuse to pay the second-to-last, and so on, all the way back up the chain to my phone company. But when has it been easy to get so many companies to do the same thing? It costs money to investigate fraud cases too, and some companies won’t think it’s worth the trade off. “Some operators take a very positive approach toward fraud management. Others see it as cost of business and don’t put a lot of resources or systems in to manage it,” says Yates.
The Intercept has an extraordinary story: the NSA and/or GCHQ hacked into the Dutch SIM card manufacturer Gemalto, stealing the encryption keys for billions of cell phones. People are still trying to figure out exactly what this means, but it seems to mean that the intelligence agencies have access to both voice and data from all phones using those cards.
Me in The Register: “We always knew that they would occasionally steal SIM keys. But all of them? The odds that they just attacked this one firm are extraordinarily low and we know the NSA does like to steal keys where it can.”
I think this is one of the most important Snowden stories we’ve read.
Sidebar photo of Bruce Schneier by Joe MacInnis.