In December 2006, Turkish authorities announced the arrest of Ali Y’nin and nine accomplices for bank fraud. They accused Y’nin of leading a gang that sent millions of virus-laden emails. About 11,000 of the recipients opened the email message and unknowingly infected their computers. Then when the victims used online banking services, the gang captured the passwords for those bank accounts and drained them using false identification, fake ATM cards, and Western Union money transfers.
How have we found ourselves in a world in which a small Turkish gang can drain bank accounts on such a massive scale? The police state that Y’nin and his accomplices sent 3.4 million emails and compromised about 11,000 bank accounts. That is a success rate of only 0.3%, but it is hard to imagine that Y’nin was disappointed at being able to access the bank accounts of “only” 11,000 people.
Part of the answer is that because the interconnected world of computers and the internet provides many advantages to criminals, they are drawn to electronic crime. Attacks can be automated and carried out in large numbers. Imagine Y’nin attempting to perform the same fraud, but in person at bank branches. If each member of his gang tried to walk into the same bank branch claiming to be a different person each time, even a bored security guard would catch on after a while. If the gang spent all day traveling to different banks and spent one hour per account, they would be doing nothing but going from bank to bank eight hours a day for over six months. The internet makes everyone more efficient, even criminals. Perhaps especially criminals.
Although Y’nin and his gang were eventually caught, it is much harder to catch an electronic thief than a robber in the physical world. Investigating a burglary might take the police an hour or perhaps a day. An electronic break-in executed across international borders might require months or years of investigation. Only a few national police agencies take on cases that require such an investment of time and effort, whereas anyone connected to the internet can now attack computers around the world. In some of these countries, laws about electronic crimes might not be clear, or there may be no effective local law enforcement to make an arrest. Is it illegal to send email spam from China? What happens if an attacker launders his attack through a computer in Nigeria? Some large companies are dedicating resources to helping police forces investigate attacks that matter to them, but it is not clear if this strategy is a good investment. Another challenge for law enforcement is that the skills required to investigate computer crime quickly go out of date because of the rapid advance of technology. If an officer learned to develop latent fingerprints thirty years ago, that knowledge is still valuable in investigating crimes. In contrast, the ability to perform a forensic investigation of a computer that runs Windows 95 is of little use today.
Because attackers can carry out attacks in a highly automated way and because they are unlikely to ever be caught, online crime is attractive to criminals not just in Turkey, but everywhere. American brokerage houses have found themselves losing millions of dollars to schemes in which criminals use other people’s money to “pump and dump” the stock market. The scheme starts when a thief buys some thinly-traded penny stock. The thief then breaks into the victim’s bank account and uses the person’s money to buy up that stock. The stock rises in price, and the thief then sells his holdings in the now-inflated stock, leaving him much richer and the victim much poorer. (If the thief is clever, he might even set up automated sale orders. The link between the thief and the automated selling of the stock is hard to prove, as is the fact that someone gained illegal access to the victim’s account.)
When confronted with computer crime, it is hard to shake the impression that information security is failing. It can seem that these failures are everywhere, filling our electronic world with spam, computer viruses, and identity theft. Even worse, these problems seem to increase even as we spend more time and money on security. We might expect that a rise in electronic crime is a natural result of the world’s becoming increasingly electronic. As money and influence move online, so do crime and vandalism. But as crime and vandalism move online, so must security. Ideally, security shows up first and allows us to preempt problems, but that seems to be a rare occurrence. It is often easier to experiment with and build software without security features, so they tend to get added later or not at all. The design of security measures can also cause frustration by getting in the way of the wrong things, so people seek to minimize such features.
But information security matters; it is important. It matters to companies and their shareholders. It is of great importance to the general public, whose personal data is stored by the companies and organizations with which they interact (and by some with which they don’t). We all hope our private files and email correspondence remain secure. The security industry and security professionals are the guardians of that personal information. They seek to frustrate bad guys such as Y’nin and his ilk by employing standard ways of working and by deploying security technologies. Unfortunately, these efforts have not always been successful.
This chapter delves into some of the most apparent failures of information security. These topics often have a nuanced history. By discussing them in detail, we lay the groundwork for the first half of this book, in which we analyze the myriad factors that have allowed such failings in information security to occur. In the second half, we build on the sum of these observations to reveal what we believe must happen to improve the state of information security in the world, how those changes can be made, and who is in a position to make them. Everyone will benefit from these changes, from multinational corporations to individual consumers.
Many books about information security focus on an idealistic notion of what security should be, or they approach security problems from a purely mathematical or technological perspective. Our approach is to begin by looking at the state of the world and trying to understand why it is the way it is. We believe that only through a balanced, well-rounded understanding of the nature of problems can we begin to design solutions that are both effective and efficient. We begin our discussion with a widely visible failure of information security.
Spam, and Other Problems with Email
The flood of unsolicited email flowing into our mailboxes seems to get worse each year, despite more antispam software, more laws, and more email lost to spam filters. In 1994, a law firm decided that the internet would be an ideal way to advertise its legal services. The firm sent a message to thousands of discussion groups, advertising its services. This was widely seen as having opened the floodgates to today’s deluge of spam.
Sending an email message is so inexpensive that it makes sense to send one to every email address that can be found, rather than trying to pick specific recipients. Imagine if companies didn’t have to pay anything to deliver paper catalogs. Everyone’s mailbox would be stuffed full of catalogs from every company in the world! After all, they can’t make money unless people know about their revolutionary product. The United States today doesn’t have a general-purpose privacy law that forbids the secret harvesting or sale of most types of personal information, so email addresses are not protected. Privacy laws in other countries vary, but strong privacy laws don’t seem to inhibit spam.
There are two types of spammers. The first are companies you did business with once, which then send you emails forever. Even if you ask them to stop, the mail keeps coming. Consumers see this as spam. However, these companies have real products to sell. They’re not outright fraudsters. The second type are criminal spammers who send spam about things such as sex pills, stocks, or quick fixes to your credit. These criminals often break into computers and use them, along with their network connections, to send spam.
As spam was rising, so was a new problem—adware. Adware companies called themselves “affiliate marketers.” They claimed that people chose to install software that displays pop-up ads to the user. Sometimes this was and even still is true, but often the adware is embedded in other software and installs itself without the meaningful consent of the PC’s owner. (By meaningful consent, we mean that the person installing the software understands what he is getting into.) Adware can also piggyback on a program that a user wants. Sometimes this is done with the cooperation of the author of the desirable program, who takes part of the revenue and earns a living by giving away his software. Other times, this is done as an unauthorized repackaging of innocent software. The adware industry has been creative in devising new ways for its software to surreptitiously install on people’s computers. Adware uses innovative means to ooze into the obscure corners of a computer so that it can’t easily be removed. Today, some experts say it can be more cost-effective to reinstall a computer than to remove a bad adware infection.
Another attack that uses email is phishing. Phishing is the art of sending fraudulent emails designed to look like they are from a company such as a bank. The phisher’s goal is to lure people into visiting a web site that looks like their bank’s real web site. The phisher (or an associate) then uses the fake but authentic-looking web site to convince people to provide personal information such as usernames, passwords, or mother’s maiden name. The attacker then takes that information and uses it to access the victim’s real bank account. Unpleasantness ensues.
At its root, phishing is a fraud that exists because of the difficulty of authentication—verifying that an entity is who it claims to be. It can be hard to identify the real sender of an email. It can be hard to tell whether a web site really belongs to a given bank. Banks and other institutions that conduct business online have the same problem in reverse. They can find it difficult to identify their customers when someone shows up at their web site to log in. As with spam, the ability to perform phishing attacks is facilitated by the global, largely anonymous nature of the internet. In January 2006, more than six billion emails were recorded as part of 15,000 different phishing scams.
Criminals use phishing attacks because they work. In a test of people’s ability to distinguish real email from fake, only 6% got all the answers right, and only half of real emails were recognized as being real. Even so, many companies that do business online have not yet adopted some simple measures that would help protect their customers. Phishing attacks use fake web sites to harvest the personal information of victims, so companies that do business online should advise their customers to never click a hyperlink in an email. Companies should also never send their customers links in an email. Customers should be told that whenever they want to visit the company online, they should use a bookmarked web address, and that web address should ideally be delivered using traditional postal mail. (This advice is intended for those companies that have ongoing relationships with their customers, and who send them occasional alerts.) Rather than take these measures, many companies have instead made things more difficult for their customers by registering new web addresses, using confusing web addresses, and using certain technologies in their web pages that make it easier for fraudsters to camouflage their actions.
To be fair, some companies have sought to address the problem of phishing by implementing a new breed of authentication technologies. In theory, these products help the customers identify when they are at a real web site rather than a fake. In practice, they don’t seem to work. For example, in a 2007 study, one of the market-leading products in this space was shown to be ineffective 92% of the time.
As we depend on email more and more, its security weaknesses become ever more apparent.