October 26, 2005

Breaking Payment Systems and other bog standard essentials

Many people have sent me pointers to How ATM fraud nearly brought down British banking. It's well worth reading as a governance story, it's as good a one as I've ever seen! In this case, a fairly bog standard insider operation in a major brit bank (not revealed but I guess everyone knows which one) raided some 2000 user accounts and probably more. They did all this through the bank's supposedly fool proof transaction system, and the bank aided and abetted by refusing to believe there was an issue! Further, given the courts willingness to protect the banks' secrecy, one can say that the courts also aided and abetted the crooks.

This is the story of how the UK banking system could have collapsed in the early 1990s, but for the forbearance of a junior barrister who also happened to be an expert in computer law - and who discovered that at that time the computing department of one of the banks issuing ATM cards had "gone rogue", cracking PINs and taking money from customers' accounts with abandon.

This is bog standard. Once a system grows to a certain point, insider fraud is almost a given, and it is to this that the wiser FCer turns. As I say, this is a must-read, especially if you are new to FC. Here's news for local currency pundits on how easy it is to forge basic paper tokens.

In a world of home laser printers and multimedia PCs, counterfeiting has become increasingly easy. With materials available at any office supply store, those with a cursory knowledge of photo-editing software can duplicate the business-card-size rewards cards once punched at Cold Stone Creamery or the stamps once given out at Subway sandwich sho........

Steven Bellovin reports that Skype have responded to criticisms over their "secret cryptoprotocol."

Skype has released an external security evaluation of its product; you can find it at http://www.skype.com/security/files/2005-031%20security%20evaluation.pdf (Skype was also clueful enough to publish the PGP signature of the report, an excellent touch -- see http://www.skype.com/security/files/2005-031%20security%20evaluation.pdf.sig) The author of the report, Tom Berson, has been in this business for many years; I have a great deal of respect for him.
--Steven M. Bellovin, http://www.cs.columbia.edu/~smb

Predictibly, people have pored over the report and criticised that, but most have missed the point that unless you happen to have an NSA-built phone on your desk, it's still more secure than anything else you have available. More usefully, Cubicle reports that there is an update to Skype that repairs a few bugs. As he includes some analysis of how to exploit and create some worms... it might be worth it to plan on updating:

The Blackhat in me salivates at the prospect. Itís beautiful security judo, leveraging tools designed to protect confidentiality (crypto) and Availability (peer-to-peer) to better hide my nefarious doings. Combine it with a skype API-based payload and youíve got a Skype worm that can leverage the implicit trust relationship of contact lists to propagate further, all potentially wrapped inside Skypeís own crypto.

Too bad the first that most of Skypeís 60 million-and-growing users will ever hear of it will be after someone who does pay attention to these sorts of things decides they want to see if itís possible to create a 60-million node botnet or retire after making The One Big Score with SkypeOut and toll fraud.

Hey Skype, Ignoring Risk is Accepting RiskĖNOT Avoiding it. Put this on your main page while upgrading is still prevention rather than incident response.

A little hyperventilated, but consider yourself in need of a Skype upgrade.

Posted by iang at October 26, 2005 03:08 PM | TrackBack

Everyone knows which one ... apart from me, that is ... any very thinly veiled hints about say ... Black horses or Honk Kong ... or B'clays or Twat West?

Posted by: Darren at October 26, 2005 12:16 PM
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