Entries Tagged "fraud"

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Survey Data on Americans and Cybersecurity

Pew Research just published their latest research data on Americans and their views on cybersecurity:

This survey finds that a majority of Americans have directly experienced some form of data theft or fraud, that a sizeable share of the public thinks that their personal data have become less secure in recent years, and that many lack confidence in various institutions to keep their personal data safe from misuse. In addition, many Americans are failing to follow digital security best practices in their own personal lives, and a substantial majority expects that major cyberattacks will be a fact of life in the future.

Here’s the full report.

Posted on February 14, 2017 at 6:48 AMView Comments

International Phone Fraud Tactics

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.

Posted on December 6, 2016 at 6:15 AMView Comments

Guessing Credit Card Security Details

Researchers have found that they can guess various credit-card-number security details by spreading their guesses around multiple websites so as not to trigger any alarms.

From a news article:

Mohammed Ali, a PhD student at the university’s School of Computing Science, said: “This sort of attack exploits two weaknesses that on their own are not too severe but when used together, present a serious risk to the whole payment system.

“Firstly, the current online payment system does not detect multiple invalid payment requests from different websites.

“This allows unlimited guesses on each card data field, using up to the allowed number of attempts—typically 10 or 20 guesses—on each website.

“Secondly, different websites ask for different variations in the card data fields to validate an online purchase. This means it’s quite easy to build up the information and piece it together like a jigsaw.

“The unlimited guesses, when combined with the variations in the payment data fields make it frighteningly easy for attackers to generate all the card details one field at a time.

“Each generated card field can be used in succession to generate the next field and so on. If the hits are spread across enough websites then a positive response to each question can be received within two seconds—just like any online payment.

“So even starting with no details at all other than the first six digits—which tell you the bank and card type and so are the same for every card from a single provider—a hacker can obtain the three essential pieces of information to make an online purchase within as little as six seconds.”

That’s card number, expiration date, and CVV code.

From the paper:

Abstract: This article provides an extensive study of the current practice of online payment using credit and debit cards, and the intrinsic security challenges caused by the differences in how payment sites operate. We investigated the Alexa top-400 online merchants’ payment sites, and realised that the current landscape facilitates a distributed guessing attack. This attack subverts the payment functionality from its intended purpose of validating card details, into helping the attackers to generate all security data fields required to make online transactions. We will show that this attack would not be practical if all payment sites performed the same security checks. As part of our responsible disclosure measure, we notified a selection of payment sites about our findings, and we report on their responses. We will discuss potential solutions to the problem and the practical difficulty to implement these, given the varying technical and business concerns of the involved parties.

BoingBoing post:

The researchers believe this method has already been used in the wild, as part of a spectacular hack against Tesco bank last month.

MasterCard is immune to this hack because they detect the guesses, even though they’re distributed across multiple websites. Visa is not.

Posted on December 5, 2016 at 6:25 AMView Comments

Auditing Elections for Signs of Hacking

Excellent essay pointing out that election security is a national security issue, and that we need to perform random ballot audits on every future election:

The good news is that we know how to solve this problem. We need to audit computers by manually examining randomly selected paper ballots and comparing the results to machine results. Audits require a voter-verified paper ballot, which the voter inspects to confirm that his or her selections have been correctly and indelibly recorded. Since 2003, an active community of academics, lawyers, election officials and activists has urged states to adopt paper ballots and robust audit procedures. This campaign has had significant, but slow, success. As of now, about three quarters of U.S. voters vote on paper ballots. Twenty-six states do some type of manual audit, but none of their procedures are adequate. Auditing methods have recently been devised that are much more efficient than those used in any state. It is important that audits be performed on every contest in every election, so that citizens do not have to request manual recounts to feel confident about election results. With high-quality audits, it is very unlikely that election fraud will go undetected whether perpetrated by another country or a political party.

Another essay along similar lines.

Related: there is some information about Russian political hacking this election cycle that is classified. My guess is that it has nothing to do with hacking the voting machines—the NSA was on high alert for anything, and I have it on good authority that they found nothing—but something related to either the political-organization hacking, the propaganda machines, or something else before Election Day.

Posted on December 2, 2016 at 6:39 AMView Comments

Hacking and the 2016 Presidential Election

Was the 2016 presidential election hacked? It’s hard to tell. There were no obvious hacks on Election Day, but new reports have raised the question of whether voting machines were tampered with in three states that Donald Trump won this month: Wisconsin, Michigan and Pennsylvania.

The researchers behind these reports include voting rights lawyer John Bonifaz and J. Alex Halderman, the director of the University of Michigan Center for Computer Security and Society, both respected in the community. They have been talking with Hillary Clinton’s campaign, but their analysis is not yet public.

According to a report in New York magazine, the share of votes received by Clinton was significantly lower in precincts that used a particular type of voting machine: The magazine story suggested that Clinton had received 7 percent fewer votes in Wisconsin counties that used electronic machines, which could be hacked, than in counties that used paper ballots. That is exactly the sort of result we would expect to see if there had been some sort of voting machine hack. There are many different types of voting machines, and attacks against one type would not work against the others. So a voting anomaly correlated to machine type could be a red flag, although Trump did better across the entire Midwest than pre-election polls expected, and there are also some correlations between voting machine type and the demographics of the various precincts. Even Halderman wrote early Wednesday morning that “the most likely explanation is that the polls were systematically wrong, rather than that the election was hacked.”

What the allegations, and the ripples they’re causing on social media, really show is how fundamentally untrustworthy our hodgepodge election system is.

Accountability is a major problem for US elections. The candidates are the ones required to petition for recounts, and we throw the matter into the courts when we can’t figure it out. This all happens after an election, and because the battle lines have already been drawn, the process is intensely political. Unlike many other countries, we don’t have an independent body empowered to investigate these matters. There is no government agency empowered to verify these researchers’ claims, even if it would be merely to reassure voters that the election count was accurate.

Instead, we have a patchwork of voting systems: different rules, different machines, different standards. I’ve seen arguments that there is security in this setup ­ an attacker can’t broadly attack the entire country ­ but the downsides of this system are much more critical. National standards would significantly improve our voting process.

Further investigation of the claims raised by the researchers would help settle this particular question. Unfortunately, time is of the essence ­ underscoring another problem with how we conduct elections. For anything to happen, Clinton has to call for a recount and investigation. She has until Friday to do it in Wisconsin, until Monday in Pennsylvania and until next Wednesday in Michigan. I don’t expect the research team to have any better data before then. Without changes to the system, we’re telling future hackers that they can be successful as long as they’re able to hide their attacks for a few weeks until after the recount deadlines pass.

Computer forensics investigations are not easy, and they’re not quick. They require access to the machines. They involve analysis of Internet traffic. If we suspect a foreign country like Russia, the National Security Agency will analyze what they’ve intercepted from that country. This could easily take weeks, perhaps even months. And in the end, we might not even get a definitive answer. And even if we do end up with evidence that the voting machines were hacked, we don’t have rules about what to do next.

Although winning those three states would flip the election, I predict Clinton will do nothing (her campaign, after all, has reportedly been aware of the researchers’ work for nearly a week). Not because she does not believe the researchers ­- although she might not -­ but because she doesn’t want to throw the post-election process into turmoil by starting a highly politicized process whose eventual outcome will have little to do with computer forensics and a lot to do with which party has more power in the three states.

But we only have two years until the next national elections, and it’s time to start fixing things if we don’t want to be wondering the same things about hackers in 2018. The risks are real: Electronic voting machines that don’t use a paper ballot are vulnerable to hacking.

Clinton supporters are seizing on this story as their last lifeline of hope. I sympathize with them. When I wrote about vote-hacking the day after the election, I said: “Elections serve two purposes. First, and most obvious, they are how we choose a winner. But second, and equally important, they convince the loser ­- and all the supporters ­- that he or she lost.” If the election system fails to do the second, we risk undermining the legitimacy of our democratic process. Clinton’s supporters deserve to know whether this apparent statistical anomaly is the result of a hack against our election system or a spurious correlation. They deserve an election that is demonstrably fair and accurate. Our patchwork, ad hoc system means they may never feel confident in the outcome. And that will further erode the trust we have in our election systems.

This essay previously appeared in the Washington Post.

EDITED TO ADD: Green Party candidate Jill Stein is calling for a recount in the three states. I have no idea if a recount includes forensic analysis to ensure that the machines were not hacked, but I doubt it. It would be funny if it wasn’t all so horrible.

Also, here’s an article from 538.com arguing that demographics explains all the discrepancies.

Posted on November 25, 2016 at 10:00 AMView Comments

Indiana's Voter Registration Data Is Frighteningly Insecure

You can edit anyone’s information you want:

The question, boiled down, was haunting: Want to see how easy it would be to get into someone’s voter registration and make changes to it? The offer from Steve Klink—a Lafayette-based public consultant who works mainly with Indiana public school districts—was to use my voter registration record as a case study.

Only with my permission, of course.

“I will not require any information from you,” he texted. “Which is the problem.”

Turns out he didn’t need anything from me. He sent screenshots of every step along the way, as he navigated from the “Update My Voter Registration” tab at the Indiana Statewide Voter Registration System maintained since 2010 at www.indianavoters.com to the blank screen that cleared the way for changes to my name, address, age and more.

The only magic involved was my driver’s license number, one of two log-in options to make changes online. And that was contained in a copy of every county’s voter database, a public record already in the hands of political parties, campaigns, media and, according to Indiana open access laws, just about anyone who wants the beefy spreadsheet.

Posted on October 11, 2016 at 2:04 PMView Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.