Entries Tagged "cybercrime"

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VOIP Encryption

There are basically four ways to eavesdrop on a telephone call.

One, you can listen in on another phone extension. This is the method preferred by siblings everywhere. If you have the right access, it’s the easiest. While it doesn’t work for cell phones, cordless phones are vulnerable to a variant of this attack: A radio receiver set to the right frequency can act as another extension.

Two, you can attach some eavesdropping equipment to the wire with a pair of alligator clips. It takes some expertise, but you can do it anywhere along the phone line’s path—even outside the home. This used to be the way the police eavesdropped on your phone line. These days it’s probably most often used by criminals. This method doesn’t work for cell phones, either.

Three, you can eavesdrop at the telephone switch. Modern phone equipment includes the ability for someone to listen in this way. Currently, this is the preferred police method. It works for both land lines and cell phones. You need the right access, but if you can get it, this is probably the most comfortable way to eavesdrop on a particular person.

Four, you can tap the main trunk lines, eavesdrop on the microwave or satellite phone links, etc. It’s hard to eavesdrop on one particular person this way, but it’s easy to listen in on a large chunk of telephone calls. This is the sort of big-budget surveillance that organizations like the National Security Agency do best. They’ve even been known to use submarines to tap undersea phone cables.

That’s basically the entire threat model for traditional phone calls. And when most people think about IP telephony—voice over internet protocol, or VOIP—that’s the threat model they probably have in their heads.

Unfortunately, phone calls from your computer are fundamentally different from phone calls from your telephone. Internet telephony’s threat model is much closer to the threat model for IP-networked computers than the threat model for telephony.

And we already know the threat model for IP. Data packets can be eavesdropped on anywhere along the transmission path. Data packets can be intercepted in the corporate network, by the internet service provider and along the backbone. They can be eavesdropped on by the people or organizations that own those computers, and they can be eavesdropped on by anyone who has successfully hacked into those computers. They can be vacuumed up by nosy hackers, criminals, competitors and governments.

It’s comparable to threat No. 3 above, but with the scope vastly expanded.

My greatest worry is the criminal attacks. We already have seen how clever criminals have become over the past several years at stealing account information and personal data. I can imagine them eavesdropping on attorneys, looking for information with which to blackmail people. I can imagine them eavesdropping on bankers, looking for inside information with which to make stock purchases. I can imagine them stealing account information, hijacking telephone calls, committing identity theft. On the business side, I can see them engaging in industrial espionage and stealing trade secrets. In short, I can imagine them doing all the things they could never have done with the traditional telephone network.

This is why encryption for VOIP is so important. VOIP calls are vulnerable to a variety of threats that traditional telephone calls are not. Encryption is one of the essential security technologies for computer data, and it will go a long way toward securing VOIP.

The last time this sort of thing came up, the U.S. government tried to sell us something called “key escrow.” Basically, the government likes the idea of everyone using encryption, as long as it has a copy of the key. This is an amazingly insecure idea for a number of reasons, mostly boiling down to the fact that when you provide a means of access into a security system, you greatly weaken its security.

A recent case in Greece demonstrated that perfectly: Criminals used a cell-phone eavesdropping mechanism already in place, designed for the police to listen in on phone calls. Had the call system been designed to be secure in the first place, there never would have been a backdoor for the criminals to exploit.

Fortunately, there are many VOIP-encryption products available. Skype has built-in encryption. Phil Zimmermann is releasing Zfone, an easy-to-use open-source product. There’s even a VOIP Security Alliance.

Encryption for IP telephony is important, but it’s not a panacea. Basically, it takes care of threats No. 2 through No. 4, but not threat No. 1. Unfortunately, that’s the biggest threat: eavesdropping at the end points. No amount of IP telephony encryption can prevent a Trojan or worm on your computer—or just a hacker who managed to get access to your machine—from eavesdropping on your phone calls, just as no amount of SSL or e-mail encryption can prevent a Trojan on your computer from eavesdropping—or even modifying—your data.

So, as always, it boils down to this: We need secure computers and secure operating systems even more than we need secure transmission.

This essay originally appeared on Wired.com.

Posted on April 6, 2006 at 5:09 AM • View Comments

AT&T's 1.9-Trillion-Call Database

This whole article is worth reading, but I found this tidbit particularly interesting:

He was alluding to databases maintained at an AT&T data center in Kansas, which now contain electronic records of 1.92 trillion telephone calls, going back decades. The Electronic Frontier Foundation, a digital-rights advocacy group, has asserted in a lawsuit that the AT&T Daytona system, a giant storehouse of calling records and Internet message routing information, was the foundation of the N.S.A.’s effort to mine telephone records without a warrant.

An AT&T spokeswoman said the company would not comment on the claim, or generally on matters of national security or customer privacy.

But the mining of the databases in other law enforcement investigations is well established, with documented results. One application of the database technology, called Security Call Analysis and Monitoring Platform, or Scamp, offers access to about nine weeks of calling information. It currently handles about 70,000 queries a month from fraud and law enforcement investigators, according to AT&T documents.

A former AT&T official who had detailed knowledge of the call-record database said the Daytona system takes great care to make certain that anyone using the database – whether AT&T employee or law enforcement official with a subpoena – sees only information he or she is authorized to see, and that an audit trail keeps track of all users. Such information is frequently used to build models of suspects’ social networks.

The official, speaking on condition of anonymity because he was discussing sensitive corporate matters, said every telephone call generated a record: number called, time of call, duration of call, billing category and other details. While the database does not contain such billing data as names, addresses and credit card numbers, those records are in a linked database that can be tapped by authorized users.

New calls are entered into the database immediately after they end, the official said, adding, “I would characterize it as near real time.”

According to a current AT&T employee, whose identity is being withheld to avoid jeopardizing his job, the mining of the AT&T databases had a notable success in helping investigators find the perpetrators of what was known as the Moldovan porn scam.

In 1997 a shadowy group in Moldova, a former Soviet republic, was tricking Internet users by enticing them to a pornography Web site that would download a piece of software that disconnected the computer user from his local telephone line and redialed a costly 900 number in Moldova.

While another long-distance carrier simply cut off the entire nation of Moldova from its network, AT&T and the Moldovan authorities were able to mine the database to track the culprits.

Posted on March 3, 2006 at 11:45 AM • View Comments

For-Profit Botnet

Interesting article about someone convicted for running a for-profit botnet:

November’s 52-page indictment, along with papers filed last week, offer an unusually detailed glimpse into a shadowy world where hackers, often not old enough to vote, brag in online chat groups about their prowess in taking over vast numbers of computers and herding them into large armies of junk mail robots and arsenals for so-called denial of service attacks on Web sites.

Ancheta one-upped his hacking peers by advertising his network of “bots,” short for robots, on Internet chat channels.

A Web site Ancheta maintained included a schedule of prices he charged people who wanted to rent out the machines, along with guidelines on how many bots were required to bring down a particular type of Web site.

In July 2004, he told one chat partner he had more than 40,000 machines available, “more than I can handle,” according to the indictment. A month later, Ancheta told another person he controlled at least 100,000 bots, and that his network had added another 10,000 machines in a week and a half.

In a three-month span starting in June 2004, Ancheta rented out or sold bots to at least 10 “different nefarious computer users,” according to the plea agreement. He pocketed $3,000 in the process by accepting payments through the online PayPal service, prosecutors said.

Starting in August 2004, Ancheta turned to a new, more lucrative method to profit from his botnets, prosecutors said. Working with a juvenile in Boca Raton, Fla., whom prosecutors identified by his Internet nickname “SoBe,” Ancheta infected more than 400,000 computers.

Ancheta and SoBe signed up as affiliates in programs maintained by online advertising companies that pay people each time they get a computer user to install software that displays ads and collects information about the sites a user visits.

Posted on February 2, 2006 at 6:06 AM • View Comments

Computer Crime Hype

I guess this is the season for sensationalist hype of computer crime: first CNN, and then USA Today (drug users and Internet crime, for a double-scary story).

Beware the Four Horsemen of the Information Apocalypse: terrorists, drug dealers, kidnappers, and child pornographers. Seems like you can scare any public into allowing the government to do anything with those four.

Posted on December 16, 2005 at 3:15 PM • View Comments

Cybercrime Pays

This sentence jumped out at me in an otherwise pedestrian article on criminal fraud:

“Fraud is fundamentally fuelling the growth of organised crime in the UK, earning more from fraud than they do from drugs,” Chris Hill, head of fraud at the Norwich Union, told BBC News.

I’ll bet that most of that involves the Internet to some degree.

And then there’s this:

Global cybercrime turned over more money than drug trafficking last year, according to a US Treasury advisor. Valerie McNiven, an advisor to the US government on cybercrime, claimed that corporate espionage, child pornography, stock manipulation, phishing fraud and copyright offences cause more financial harm than the trade in illegal narcotics such as heroin and cocaine.

This doesn’t bode well for computer security in general.

Posted on November 30, 2005 at 6:05 AM • View Comments

Hackers and Criminals

More evidence that hackers are migrating into crime:

Since then, organised crime units have continued to provide a fruitful income for a group of hackers that are effectively on their payroll. Their willingness to pay for hacking expertise has also given rise to a new subset of hackers. These are not hardcore criminals in pursuit of defrauding a bank or duping thousands of consumers. In one sense, they are the next generation of hackers that carry out their activities in pursuit of credibility from their peers and the ‘buzz’ of hacking systems considered to be unbreakable.

Where they come into contact with serious criminals is through underworld forums and chatrooms, where their findings are published and they are paid effectively for their intellectual property. This form of hacking – essentially ‘hacking for hire’ – is becoming more common with hackers trading zero-day exploit information, malcode, bandwidth, identities and toolkits underground for cash. So a hacker might package together a Trojan that defeats the latest version of an anti-virus client and sell that to a hacking community sponsored by criminals.

Posted on November 17, 2005 at 12:25 PM • View Comments

Identity Theft Over-Reported

I’m glad to see that someone wrote this article. For a long time now, I’ve been saying that the rate of identity theft has been grossly overestimated: too many things are counted as identity theft that are just traditional fraud. Here’s some interesting data to back that claim up:

Multiple surveys have found that around 20 percent of Americans say they have been beset by identity theft. But what exactly is identity theft?

The Identity Theft and Assumption Deterrence Act of 1998 defines it as the illegal use of someone’s “means of identification”—including a credit card. So if you lose your card and someone else uses it to buy a candy bar, technically you have been the victim of identity theft.

Of course misuse of lost, stolen or surreptitiously copied credit cards is a serious matter. But it shouldn’t force anyone to hide in a cave.

Federal law caps our personal liability at $50, and even that amount is often waived. That’s why surveys have found that about two-thirds of people classified as identity theft victims end up paying nothing out of their own pockets.

The more pernicious versions of identity theft, in which fraudsters use someone else’s name to open lines of credit or obtain government documents, are much rarer.

Consider a February survey for insurer Chubb Corp. of 1,866 people nationwide. Nearly 21 percent said they had been an identity theft victim in the previous year.

But when the questioners asked about specific circumstances—and broadened the time frame beyond just the previous year—the percentages diminished. About 12 percent said a collection agency had demanded payment for purchases they hadn’t made. Some 8 percent said fraudulent checks had been drawn against their accounts.

In both cases, the survey didn’t ask whether a faulty memory or a family member—rather than a shadowy criminal—turned out to be to be the culprit.

It wouldn’t be uncommon. In a 2005 study by Synovate, a research firm, half of self-described victims blamed relatives, friends, neighbors or in-home employees.

When Chubb’s report asked whether people had suffered the huge headache of finding that someone else had taken out loans in their name, 2.4 percent—one in 41 people—said yes.

So what about the claim that 10 million Americans are hit every year, a number often used to pitch credit monitoring services? That statistic, which would amount to about one in 22 adults, also might not be what it seems.

The figure arose in a 2003 report by Synovate commissioned by the Federal Trade Commission. A 2005 update by Synovate put the figure closer to 9 million.

Both totals include misuse of existing credit cards.

Subtracting that, the identity theft numbers were still high but not as frightful: The FTC report determined that fraudsters had opened new accounts or committed similar misdeeds in the names of 3.2 million Americans in the previous year.

The average victim lost $1,180 and wasted 60 hours trying to resolve the problem. Clearly, it’s no picnic.

But there was one intriguing nugget deep in the report.

Some 38 percent of identity theft victims said they hadn’t bothered to notify anyone—not the police, not their credit card company, not a credit bureau. Even when fraud losses purportedly exceeded $5,000, the kept-it-to-myself rate was 19 percent.

Perhaps some people decide that raising a stink over a wrongful charge isn’t worth the trouble. Even so, the finding made the overall validity of the data seem questionable to Fred Cate, an Indiana University law professor who specializes in privacy and security issues.

“That’s not identity theft,” he said. “I’m just confident if you saw a charge that wasn’t yours, you’d contact somebody.”

Identity theft is a serious crime, and it’s a major growth industry in the criminal world. But we do everyone a disservice when we count things as identity theft that really aren’t.

Posted on November 16, 2005 at 1:21 PM • View Comments

The Zotob Worm

If you’ll forgive the possible comparison to hurricanes, Internet epidemics are much like severe weather: they happen randomly, they affect some segments of the population more than others, and your previous preparation determines how effective your defense is.

Zotob was the first major worm outbreak since MyDoom in January 2004. It happened quickly—less than five days after Microsoft published a critical security bulletin (its 39th of the year). Zotob’s effects varied greatly from organization to organization: some networks were brought to their knees, while others didn’t even notice.

The worm started spreading on Sunday, 14 August. Honestly, it wasn’t much of a big deal, but it got a lot of play in the press because it hit several major news outlets, most notably CNN. If a news organization is personally affected by something, it’s much more likely to report extensively on it. But my company, Counterpane Internet Security, monitors more than 500 networks worldwide, and we didn’t think it was worth all the press coverage.

By the 17th, there were at least a dozen other worms that exploited the same vulnerability, both Zotob variants and others that were completely different. Most of them tried to recruit computers for bot networks, and some of the different variants warred against each other—stealing “owned” computers back and forth. If your network was infected, it was a mess.

Two weeks later, the 18-year-old who wrote the original Zotob worm was arrested, along with the 21-year-old who paid him to write it. It seems likely the person who funded the worm’s creation was not a hacker, but rather a criminal looking to profit.

The nature of worms has changed in the past few years. Previously, hackers looking for prestige or just wanting to cause damage were responsible for most worms. Today, they’re increasingly written or commissioned by criminals. By taking over computers, worms can send spam, launch denial-of-service extortion attacks, or search for credit-card numbers and other personal information.

What could you have done beforehand to protect yourself against Zotob and its kin? “Install the patch” is the obvious answer, but it’s not really a satisfactory one. There are simply too many patches. Although a single computer user can easily set up patches to automatically download and install—at least Microsoft Windows system patches—large corporate networks can’t. Far too often, patches cause other things to break.

It would be great to know which patches are actually important and which ones just sound important. Before that weekend in August, the patch that would have protected against Zotob was just another patch; by Monday morning, it was the most important thing a sysadmin could do to secure the network.

Microsoft had six new patches available on 9 August, three designated as critical (including the one that Zotob used), one important, and two moderate. Could you have guessed beforehand which one would have actually been critical? With the next patch release, will you know which ones you can put off and for which ones you need to drop everything, test, and install across your network?

Given that it’s impossible to know what’s coming beforehand, how you respond to an actual worm largely determines your defense’s effectiveness. You might need to respond quickly, and you most certainly need to respond accurately. Because it’s impossible to know beforehand what the necessary response should be, you need a process for that response. Employees come and go, so the only thing that ensures a continuity of effective security is a process. You need accurate and timely information to fuel this process. And finally, you need experts to decipher the information, determine what to do, and implement a solution.

The Zotob storm was both typical and unique. It started soon after the vulnerability was published, but I don’t think that made a difference. Even worms that use six-month-old vulnerabilities find huge swaths of the Internet unpatched. It was a surprise, but they all are.

This essay will appear in the November/December 2005 issue of IEEE Security & Privacy.

Posted on November 11, 2005 at 7:46 AM • View Comments

Fraudulent Stock Transactions

From a Business Week story:

During July 13-26, stocks and mutual funds had been sold, and the proceeds wired out of his account in six transactions of nearly $30,000 apiece. Murty, a 64-year-old nuclear engineering professor at North Carolina State University, could only think it was a mistake. He hadn’t sold any stock in months.

Murty dialed E*Trade the moment its call center opened at 7 a.m. A customer service rep urged him to change his password immediately. Too late. E*Trade says the computer in Murty’s Cary (N.C.) home lacked antivirus software and had been infected with code that enabled hackers to grab his user name and password.

The cybercriminals, pretending to be Murty, directed E*Trade to liquidate his holdings. Then they had the brokerage wire the proceeds to a phony account in his name at Wells Fargo Bank. The New York-based online broker says the wire instructions appeared to be legit because they contained the security code the company e-mailed to Murty to execute the transaction. But the cyberthieves had gained control of Murty’s e-mail, too.

E*Trade recovered some of the money from the Wells Fargo account and returned it to Murty. In October, the Indian-born professor reached what he calls a satisfactory settlement with the firm, which says it did nothing wrong.

That last clause is critical. E*trade insists it did nothing wrong. It executed $174,000 in fraudulent transactions, but it did nothing wrong. It sold stocks without the knowledge or consent of the owner of those stocks, but it did nothing wrong.

Now quite possibly, E*trade did nothing wrong legally. There may very well be a paragraph buried in whatever agreement this guy signed that says something like: “You agree that any trade request that comes to us with the right password, whether it came from you or not, will be processed.” But there’s the market failure. Until we fix that, these losses are an externality to E*Trade. They’ll only fix the problem up to the point where customers aren’t leaving them in droves, not to the point where the customers’ stocks are secure.

Posted on November 10, 2005 at 2:40 PM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.