Identity Theft and Children
Is this the kind of article that spurs legislators into action? After all, we have to protect our children.
Entries Tagged "identity theft"
Page 7 of 13
Insider Identity Theft
Banks are spending millions preventing outsiders from stealing their customers’ identities, but there is a growing insider threat:
Widespread outsourcing of data management and other services has exposed some weaknesses and made it harder to prevent identity theft by insiders.
“There are lots of weak links,” said Oveissi Field. “Back-up tapes are being sent to offsite storage sites or being mailed and getting into the wrong hands or are lost through carelessness.”
In what many regard as the biggest wake-up call in recent memory for financial institutions, thieves disguised as cleaning staff last year nearly stole the equivalent of more than $400 million from the London branch of Sumitomo Mitsui.
Fighting Fraudulent Transactions
Last March I wrote that two-factor authentication isn’t going to reduce financial fraud or identity theft, that all it will do is force the criminals to change their tactics:
Unfortunately, the nature of attacks has changed over those two decades. Back then, the threats were all passive: eavesdropping and offline password guessing. Today, the threats are more active: phishing and Trojan horses.
Here are two new active attacks we’re starting to see:
- Man-in-the-Middle attack. An attacker puts up a fake bank website and entices user to that website. User types in his password, and the attacker in turn uses it to access the bank’s real website. Done right, the user will never realize that he isn’t at the bank’s website. Then the attacker either disconnects the user and makes any fraudulent transactions he wants, or passes along the user’s banking transactions while making his own transactions at the same time.
- Trojan attack. Attacker gets Trojan installed on user’s computer. When user logs into his bank’s website, the attacker piggybacks on that session via the Trojan to make any fraudulent transaction he wants.
See how two-factor authentication doesn’t solve anything? In the first case, the attacker can pass the ever-changing part of the password to the bank along with the never-changing part. And in the second case, the attacker is relying on the user to log in.
The solution is not to better authenticate the person, but to authenticate the transaction. (Think credit cards. No one checks your signature. They really don’t care if you’re you. They maintain security by authenticating the transactions.)
Of course, no one listens to me. U.S. regulators required banks to implement two-factor authentication by the end of this year. But customers are rebelling, and banks are scrambling to figure out something—anything—else. And, amazingly enough and purely by accident it seems, they’ve stumbled on security solutions that actually work:
Instead, to comply with new banking regulations and stem phishing losses, banks and the vendors who serve them are hurriedly putting together multipronged strategies that they say amount to “strong” authentication. The emerging approach generally consists of somehow recognizing a customer’s computer, asking additional challenge questions for risky behavior and putting in place back-end fraud detection.
[…]
Despite the FFIEC guidance about authentication, the emerging technologies that actually seem to hold the most promise for protecting the funds in consumer banking accounts aren’t authentication systems at all. They’re back-end systems that monitor for suspicious behavior.
Some of these tools are rule-based: If a customer from Nebraska signs on from, say, Romania, the bank can determine that the log-on always be considered suspect. Others are based on a risk score: That log-on from Romania would add points to a risk score, and when the score reaches a certain threshold, the bank takes action.
Flagged transactions can get bumped to second-factor authentication—usually, a call on the telephone, something the user has. This has long been done manually in the credit card world. Just think about the last phone call you got from your credit card company’s fraud department when you (or someone else) tried to make a large purchase with your credit card in Europe. Some banks, including Washington Mutual, are in the process of automating out-of-band phone calls for risky online transactions.
Exactly. That’s how you do it.
EDITED TO ADD (12/6): Another example.
UK RFID Passport Cracked
EDITED TO ADD (11/17): Commentary by Bruce Sterling.
FIDIS on RFID Passports
The “Budapest Declaration on Machine Readable Travel Documents“:
Abstract:
By failing to implement an appropriate security architecture, European governments have effectively forced citizens to adopt new international Machine Readable Travel Documents which dramatically decrease their security and privacy and increases risk of identity theft. Simply put, the current implementation of the European passport utilises technologies and standards that are poorly conceived for its purpose. In this declaration, researchers on Identity and Identity Management (supported by a unanimous move in the September 2006 Budapest meeting of the FIDIS “Future of Identity in the Information Society” Network of Excellence[1]) summarise findings from an analysis of MRTDs and recommend corrective measures which need to be adopted by stakeholders in governments and industry to ameliorate outstanding issues.
EDITED TO ADD (11/9): Slashdot thread.
Insider Identity Theft
CEO arrested for stealing the identities of his employees:
Terrence D. Chalk, 44, of White Plains was arraigned in federal court in White Plains, along with his nephew, Damon T. Chalk, 35, after an FBI investigation turned up the curious lending and spending habits. The pair are charged with submitting some $1 million worth of credit applications using the names and personal information—names, addresses and social security numbers—of some of Compulinx’s 50 employees. According to federal prosecutors, the employees’ information was used without their knowledge; the Chalks falsely represented to the lending institutions, in writing and in face-to-face meetings, that the employees were actually officers of the company.
Online ID Theft Hyped
Does this surprise anyone?
While keylogging software, phishing e-mails that impersonate official bank messages and hackers who break into customer databases may dominate headlines, more than 90% of identity fraud starts off conventionally, with stolen bank statements, misplaced passwords or other similar means, according to Javelin Strategy & Research.
“An insignificant portion of identity fraud actually starts with the Internet,” said James Van Dyke, president of Javelin, who pointed out that many firms still rely on simple security questions such as one’s mother’s maiden name. “The Internet always grabs the headlines, but it is individuals who are close to the victims, such as family and friends, that are doing most of it,” he said.
[…]
While fraudsters often use the Internet to access existing bank, phone or brokerage accounts or to create new ones using stolen details, in only one out of 10 of those incidents did the actual theft of the personal data take place through e-mail or the Web or somewhere else on the Internet, according to Javelin. “No matter how you slice the data, it’s really hard to arrive at a scenario where the Internet could be the source of the majority of identity fraud,” Van Dyke said.
All told, 4% of Americans were affected by identity fraud in 2005, a statistic that is slowly shrinking, though the value of each fraud incident is growing, Van Dyke said. The total losses attributed to identity fraud has held steady the past three years.
Organized Cybercrime
Cybercrime is getting organized:
Cyberscams are increasingly being committed by organized crime syndicates out to profit from sophisticated ruses rather than hackers keen to make an online name for themselves, according to a top U.S. official.
Christopher Painter, deputy chief of the computer crimes and intellectual property section at the Department of Justice, said there had been a distinct shift in recent years in the type of cybercriminals that online detectives now encounter.
“There has been a change in the people who attack computer networks, away from the ‘bragging hacker’ toward those driven by monetary motives,” Painter told Reuters in an interview this week.
Although media reports often focus on stories about teenage hackers tracked down in their bedroom, the greater danger lies in the more anonymous virtual interlopers.
“There are still instances of these ‘lone-gunman’ hackers but more and more we are seeing organized criminal groups, groups that are often organized online targeting victims via the internet,” said Painter, in London for a cybercrime conference.
I’ve been saying this sort of thing for years, and have long complained that cyberterrorism gets all the press while cybercrime is the real threat. I don’t think this article is fear and hype; it’s a real problem.
Renew Your Passport Now!
If you have a passport, now is the time to renew it—even if it’s not set to expire anytime soon. If you don’t have a passport and think you might need one, now is the time to get it. In many countries, including the United States, passports will soon be equipped with RFID chips. And you don’t want one of these chips in your passport.
RFID stands for “radio-frequency identification.” Passports with RFID chips store an electronic copy of the passport information: your name, a digitized picture, etc. And in the future, the chip might store fingerprints or digital visas from various countries.
By itself, this is no problem. But RFID chips don’t have to be plugged in to a reader to operate. Like the chips used for automatic toll collection on roads or automatic fare collection on subways, these chips operate via proximity. The risk to you is the possibility of surreptitious access: Your passport information might be read without your knowledge or consent by a government trying to track your movements, a criminal trying to steal your identity or someone just curious about your citizenship.
At first the State Department belittled those risks, but in response to criticism from experts it has implemented some security features. Passports will come with a shielded cover, making it much harder to read the chip when the passport is closed. And there are now access-control and encryption mechanisms, making it much harder for an unauthorized reader to collect, understand and alter the data.
Although those measures help, they don’t go far enough. The shielding does no good when the passport is open. Travel abroad and you’ll notice how often you have to show your passport: at hotels, banks, Internet cafes. Anyone intent on harvesting passport data could set up a reader at one of those places. And although the State Department insists that the chip can be read only by a reader that is inches away, the chips have been read from many feet away.
The other security mechanisms are also vulnerable, and several security researchers have already discovered flaws. One found that he could identify individual chips via unique characteristics of the radio transmissions. Another successfully cloned a chip. The State Department called this a “meaningless stunt,” pointing out that the researcher could not read or change the data. But the researcher spent only two weeks trying; the security of your passport has to be strong enough to last 10 years.
This is perhaps the greatest risk. The security mechanisms on your passport chip have to last the lifetime of your passport. It is as ridiculous to think that passport security will remain secure for that long as it would be to think that you won’t see another security update for Microsoft Windows in that time. Improvements in antenna technology will certainly increase the distance at which they can be read and might even allow unauthorized readers to penetrate the shielding.
Whatever happens, if you have a passport with an RFID chip, you’re stuck. Although popping your passport in the microwave will disable the chip, the shielding will cause all kinds of sparking. And although the United States has said that a nonworking chip will not invalidate a passport, it is unclear if one with a deliberately damaged chip will be honored.
The Colorado passport office is already issuing RFID passports, and the State Department expects all U.S. passport offices to be doing so by the end of the year. Many other countries are in the process of changing over. So get a passport before it’s too late. With your new passport you can wait another 10 years for an RFID passport, when the technology will be more mature, when we will have a better understanding of the security risks and when there will be other technologies we can use to cut the risks. You don’t want to be a guinea pig on this one.
This op ed appeared on Saturday in the Washington Post.
I’ve written about RFID passports many times before (that last link is an op-ed from The International Herald-Tribune), although last year I—mistakenly—withdrew my objections based on the security measures the State Department was taking. I’ve since realized that they won’t be enough.
EDITED TO ADD (9/29): This op ed has appeared in about a dozen newspapers. The San Jose Mercury News published a rebuttal. Kind of lame, I think.
EDITED TO ADD (12/30): Here’s how to disable a RFID passport.
Fraudulent Australian Census Takers
In Australia, criminals are posing as census takers and harvesting personal data for fraudulent purposes.
EDITED TO ADD (8/21): I didn’t notice that this link is from 2001. Sorry about missing that, but it actually makes the story more interesting. This is the sort of identity-theft tactic that I would have expected to see this year, as criminals have gotten more and more sophisticated. It surprises me that they were doing this five years ago as well.
Sidebar photo of Bruce Schneier by Joe MacInnis.