Privacy and Identity Theft

A forum at Dell’s website has described that replacement R410 server motherboards that are infected with malware/spyware have been shipped by the company to customers.

Apparently the systems management firmware has been compromised in the manufacturing supply chain, and has been infected with malicious software. Dell is calling customers to warn them of the malware infections, and giving them instructions on how to scan the flash memory to detect and remove the spyware.

It’s another example in the growing set of supply chain vulnerabilities that are starting to emerge in the IT industry. Vendors of IT infrastructure must realize that attackers are eager to infect their products, and are even doing so inside the supply chain itself.

I am in London, UK this week.

The UK Ministry of Defense has admitted to losing 340 laptops over the last two years, and less than half of them were encrypted. A further 215 USB memory sticks were lost, and many were not encrypted either. When you add up lost mobile phones, CDs, PDAs as well, it turns out that only 20% of these were encrypted.

I spent much of the day being interviewed by security and business press. There is considerable interest in how the Information Commissioner’s Office (ICO) will deal with government agencies that have lax security and data protection practices. For corporations, the ICO can now fine up to 500,00 pounds, but it’s unclear how government bureaus will be disciplined.

Mozilla has disabled a Firefox browser plug-in, Mozilla Sniffer, that steals your usernames and passwords and sends them to a third party website that cyber-criminals presumably use.

I will be speaking at the Atlanta Infragard A-List security training conference on August 25th.

I will talk about the evolving cyber-crime threat landscape that is targeting users of online banking systems. I’ll also review various ways that banks can deploy solutions to help protect their users. I’ll look at various protection types for consumer banking versus corporate banking systems and online trading systems.

If you would like to attend the Infragard meeting, you can find more information here: Atlanta Infragard A-List Conference.

Infragard is a partnership of businesses, the FBI, educational entities and the National Infrastructure Protection Center. This alliance is designed to protect IT systems from hacker attacks and other intrusions by providing a network for sharing information, anonymously, about attacks and how to protect against them.

11 alleged Russian spies have been arrested and charged with conspiracy to commit an offense against the United States by not registering with the attorney general. 9 of these individuals have also been charged with money laundering. Details on the people arrested are here. One couple is based in Cambridge, MA.

The FBI says that these spies not only used encryption to protect data on their laptops and USB flash drives, but that they also are suspected of using proprietary Russian-build steganography software to hide data inside images and other files on their computers.

Steganography is the technique of hiding information inside other documents or data, so that it cannot be detected. Combining steganography with cryptography can create systems of communications and data protection that are incredibly difficult to detect and to crack.

For example, imagine encrypting a data file using strong encryption, and then inserting that file as noise in the soundtrack or video stream of a large .wmv video file. Then posting that file to a website or sharing it on a bittorrent network for its intended recipients to download. If you communicate out-of-band (through an email or a phone call or SMS) to your recipients the name of the video file, and if there is a key sharing protocol (ie. they know the password to decrypt the data), then its highly likely that only that person will be able to know that the encrypted data is there, and be able to decrypt it.

If anyone else downloads the file, even using steganographic detection tools they are unlikely to detect the encrypted data. And even if they were able to extract it, they would still have to crack the encryption.

In fact, one wishing to communicate covertly would want other people to download the file, so that nobody monitoring networks can tell who the file is intended for.

In the case we are discussing today, the alleged Russian spies were detected sending data to known addresses of Russian government computers (we assume IP addresses). Using the technique I discuss, they would have been able to avoid such detection.

One other thing I found interesting about this article is that a 27 character password was required to access the steganographic data. Sounds like a great security measure to have such a long password. However, the agent wrote the password down on a piece of paper! In such a case, it would have been much more secure to use a shorter password that was more easily remembered.

White house cybersecurity coordinator Howard Schmidt has announced the NSTIC, the National Strategy for Trusted Identities in Cyberspace. The initiative is a blend of federated identities combined with government (or trusted third party)- issued digital identities (primarily in the form of digital certificates).

I do think that a national federated identity scheme requires strong authentication, at least for any site that can do transactions or reveal personal information (which is pretty much any site of value). I also think that the Federal government is one of the only hopes we have of achieving such a system, as it will require a big infusion of cash.

However, I am skeptical that this plan can be achieved, given the diverse interests of the private sector and the federal government agencies, and the myriad of agendas and technological approaches. Look, Microsoft has failed at this many times, and they control 90%+ of the computer desktops out there.

According to a research report by security firm SMobile Systems, about 20 percent of the 48,000 Android apps in the Android marketplace allow a third party to access the user’s data. This is typically apps sending SMS messages to premium phone numbers, or making phone calls on behalf of users.

Many of those applications are legitimate, but some are definitely malicious. Some of these applications do many of the things that spyware does: getting access to email and text messages, tracking phone call information and device location, etc.

Bank Info Security magazine today published an interview with Doug Johnson of the American Bankers Association (ABA) on the topic of corporate banking account takeovers by cyber criminals. Cyber criminals are increasingly using malware to steal online access to the bank accounts of small and medium sized companies and government agencies, and fraudulently transfer hundreds of thousands of dollars out of those accounts.

The interview is worth reading, and it can be found here.

When asked how big of a threat cyber criminal takeovers of Internet corporate banking accounts is, Mr. Johnson replied:

“Well, I think that the threat is very large. I think that the threat is not only a large one from the standpoint of the number of cases — which the FBI continues to observe are increasing for them. But I think the biggest risk that we face here, as it relates to the corporate account takeover, is the damage it does to the reputation of financial institutions and financial institutions’ customers, and the damage it does potentially to the relationship between our customers and our financial institutions. Because I do believe at the end of the day this is all about shared responsibility. Both financial institutions as well as financial institution customers do have a responsibility to have skin in the game to protect accounts, and I think that it is only through that active partnership that they were able really to address the current threat.”

The United Kingdom’s Information Commissioner’s Office has warned organisations that they need to minimise the risk of mistakes, as the number of reported data breaches exceeds 1,000.

An ICO report revealed that 254 breaches were as a result of information being disclosed in error, 307 were as a result of stolen data or hardware and 233 due to lost data or hardware.

David Smith, deputy commissioner at the ICO, said: “We all know that mistakes can happen but, the fact is that human error is behind a high proportion of security breaches that have been reported to us. Extra vigilance is required so that people’s personal information does not end up in the wrong hands.

“Organisations should have clear security and disclosure procedures that staff can understand, properly implement these and ensure that they are being followed by staff. Staff must be adequately trained not just in the value of personal information, but in how to protect it.

“We are keen to work with organisations to prevent breaches happening in the first place and to help ensure that things are put right when they do go wrong.”

IronKey’s Chief Technology Officer, Gil Spencer, was at the AUSCERT security conference in Australia this week. He was the lucky recipient of a promotional USB flash drive from IBM at the conference.

Today IBM sent out an apology. It seems that the USB flash drives that they handed out were infected with autorun malware. Nice one, IBM.

They should have given out IronKey secure devices. IronKey Enterprise devices have anti-malware software and hardware and firmware protection against autorun USB malware.