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Schneier: Make Banks Responsible for Phishers
abgillette writes "Writing for Wired News, security guru Bruce Schneier says that the only way to stop phishers and identity thieves is to make financial institutions solely responsible: "Push the responsibility -- all of it -- for identity theft onto the financial institutions, and phishing will go away. This fraud will go away not because people will suddenly get smart and quit responding to phishing e-mails, because California has new criminal penalties for phishing, or because ISPs will recognize and delete the e-mails. It will go away because the information a criminal can get from a phishing attack won't be enough for him to commit fraud -- because the companies won't stand for all those losses.""
However, it doesn't seem very feasible.
... which I think there is more than enough uncertainty on the subject to prevent that.
There is no way we can get the government to do such a thing... and such losses may even effect federal insurance and our interest rates...
Depending on how many morons there are getting hit by phishing scams, this could have a large effect.
Of course... that's assuming it ever got made into 'law'...
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Personal responsibility has to come into play somewhere. If people aren't educated enough to know NOT to email back their bank information to an unsolicited source, than just whose fault is it? The banks obviously need to do more, but in the end someone has to be responsible for their own actions.
I don't think there's much of a chance of this kind of thing ever getting implemented. The financial industry would kill any legislator who tried to introduce legislation like this. If anything got through, they'd convince the executive branch not to enforce it. I'm sorry to say this, but the banks hold our money and they're very cavalier about to whom they give access and they like it that way.
What's wrong with "all of the above?" It would seem to me that a multi-pronged attack to the problem would be best, because I really don't see how "just" holding the financial institutions responsible will make the problem disappear completely. Scammers are creative, after all, and the people who fall for their scams can be pretty friggin' dumb.
Dear Bruce Schneier,
We read with interest your comments on preventing phishing activities.
Our conclusion is that we are not taking appropriate measures to prevent phishing.
Therefore, we have acted to prevent such damages in the future. This action is the only certain method of fraud provention: Your account has been closed and we have placed you on a universal banking blacklist to prevent you being able to open an account with any other bank.
Thank you for your refreshing point of view, and good luck.
Sincerly,
Your Bank
---"What did I say that sounded like 'Tell me about your day?'"---
Forcing the responsibility on the banks is only going to encourage the banks to treat the customers worse than they already do.
Your bank already has your home address (and probably your home phone number).
All they have to do is to institute a "no email from us, ever" policy and spend some time getting that message out to their customers.
Sure, this will cut down on the ad revenue from the banks, so what?
If they absolutely need to have some form of email interaction, they can run an internal (no external SMTP connections) web-based email system so the clients (you) can email the bank's employees.
If you can't do something securely, maybe you should not be doing it.
The only way something like this works is if there is an neutral agency that one can report this to. Even then it probabaly won't. It's in the financial institutions best interest to keep all security problems secret. That is today, even with them not being responsibile, in a day where they are resonsible, they'll act just the tabacoo companies did/do "There is no security problem, Mr. Senator. No, there is no problem with identity theft, not at all, we have it under control.". The cheapest short term solution is the best one to a company, these guys pretend to think long term, but they don't. Don't assume they will.
Burn Hollywood Burn
In the end the consumer will always pay no matter what happens. If they exclusively make financial institiutions responsible for phishing then that just means they will charge us more for their services. If they don't do anything about it, well, then we still pay when some schmuck steals our identy and our money.
It amazes me that, for example, no-one really checks signatures on credit card slips or that you don't need a PIN to buy gas with a card at the pump.
If you tighten up all these processes then just knowing five pieces of data about a person won't let you access their accounts. Why sign your credit card at all when no-one even LOOKS at the signature and YOU are liable for fraudulent use of the card?
Legislation shouldn't be used as a way of solving a technical problem, and this is really just a technical problem with e-mail.
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Actually, I don't believe adding additional protections to the websites is the idea. The idea is that the richest institutions in the world (banks) should be fighting phishers. They have the clout and the wearwithall to easily take scammers to court, and likely have branches in enough countries to try them locally, rather than sending futile "DMCA cease and desist"-like letters to non-US countries.
This might turn out to be a good idea, or maybe the banks will realize that the scammers are just doing what banks (historically) do, which is ripoff the poor and uneducated. Anywho, being a well-informed and adept engineer of the internet age, I still do all my investing in person because I'm paranoid as heck =].
When you're afraid to download music illegally in your own home, then the terrorists have won!
It will never happen.
Consider this: The credit card companies were getting reamed by people getting a boatload of credit cards, running them up to the limit, then filing for bankruptcy.
Now, the real solution to this would have been for the credit card companies to have done their jobs and really examined the credit ratings of the people to whom they gave these cards, and to have given people reasonable credit limits (I shall use myself for an example - I have a single credit card which has a limit of well over one-half of my yearly salary - there is NO REASON for me to have that much unsecured credit - and no, I did NOT request that limit, they gave it to me on their own).
However, that would require the credit card companies to actually do work and would impair their ability to take people almost to bankruptcy and make lots of money on revolving credit interest.
So, what did the credit card companines do? They took their enourmous profits and paid for immense lobbying to get a law passed to insure they get their money even if you file for bankruptcy.
Now, what is another word for "credit card company"? I'll give you a hint - it starts with "B", ends in "K", and has 4 letters. Wanna buy a vowel (at 15% APR)?
Making banks actually take responsibility for phishing means banks would have to do work on their online banking and credit applications. It would mean they would have to make it harder for people to buy things online (read: go into debt). It would CUT INTO THEIR PROFITS!
So what is a good, responsible banker to do? Call 1-800-RENT-A-SENATOR.
www.eFax.com are spammers
Sadly, if one of these fraudsters gets enough info on you, you may find that "you" are doing business with a bank you've never heard of with a line of credit you've never asked for ;)
psmylie's dictionary: Godzillion (noun) Any number large enough to destroy Tokyo
You can pick a Medeco lock, too, but that's not a reason to just use rubber bands to hold your front door closed. Right now, it's trivial to commit fraud, and it should be difficult.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
A properly formed e-mail from a reputable company nearly completely eliminates all possible intercepts. At least as many as can be eliminated by simply going to the website in the first place without an e-mail prompt.
case in point:
I recently received an actual e-mail from PayPal, this e-mail suggested that my on-file credit card was about to expire. The first thing that keyed me in and made me actually read this mail was that they referenced the last four digits of said card. Next, they suggested that I logon to their website and update the credit card's expiration date. Most importantly they didn't even offer a link to paypal.com, they simply said to logon and then gave instructions as to how to change it. Not the first link in the whole e-mail. This effectively eliminates fraud as a possibility. While it is still possible that paypal.com itself could be hijacked or some other esoteric scheme, the 99.9% possibilities are all eliminated simply by not providing any link.
Chase - has a login on their insecure site http://www.chase.com/, and puts a "lock" image on the page. This does not teach users where the proper lock is and dumbs down security.
Amex - does the same thing that Chase does on americanexpress.com.
CitiBank - Another bad problem, weird domain names. While Citibank uses citi.com and citibank.com, they put their credit card login on "accountonline.com"... Users have gotten used to weird domain names, and just trust the site when they see the logo. They use another domain name when linking from emails!
-- these are only opinions and they might not be mine.
Try the ING Direct site - best over the web security ever. You need your account number, some ever changing specific fraction of your social security #, zip code, or other identifier, and a set of letters that corresponds to a pin that are entered by clicking a icture of a number pad with a mouse. If "s" is assigned to "3" this time, it won't be the next time you're on.
It's a minor pain in the butt to get to your account, but definitely more secure.
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
Then you hand your credit card to the waiter, who goes into another room with it.
Mac addresses can be faked and credit cards (and random number generators!) can be stolen. And whatever technical solution you can possibly find, it cannot interface with an insecure OS (such as Windows or many *nixs, prolly Macs too, but I'm not too savvy there) and remain secure. And as long as the vast majority of people use insecure OSes, a secure technical solution is unfeasible.
Thus, I disagree whole-heartedly. Law is the best safe-gaurd against criminals. Providing and advocating a legal recourse against online fraud will provide an avenue for banks to fight back. And it would be completely transparent for the end-user. They keep getting scammed while the banks go around pressing charges on the scammers until they're gone. I know it's fighting the symptom, not the cause, but sometimes that's better.
We all want to code like Torvalds and redesign the entire system from the bottom up whenever theres the teensiest bug, but we also all know that's unrealistic. Look at law as a CPU-intensive bug-fix for society. It'll provide it quick and easy stop-gap to the problems created by shifting to the e-commerce. We can worry about properly rebuilding the infrastructure in the next update =].
When you're afraid to download music illegally in your own home, then the terrorists have won!
As long as they make a backup copy, I'm fine with it.
Hi, i just lost $600,000. Can you restore my backup please?
The only problem I see with this is that one of the major reasons for online banking is the convenience of being able to do it anywere. Limiting it to one computer is counter productive in this right, and will discourage people from logging on in the first place, which come to think of it, will most likely do a better job then the best safeguards in the world.
Also, if a phisher has your info, whats to keep him from calling the 800 number and adding his computer to the list of allowed systems?
Behold, another webcomic!
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Ok. As a guy that both works for banks and works for ISPs and deals with end users web sites and all that... I have to say I see a lot of willful ignorance on all sides.
People or the general public are really really far behind as to understanding the basics of keeping safe while using email. Sit them down in front of a computer and all of a sudden common sense is gone.
The banks on the other hand, treat these issues as PR that the marking or HR chicks take care of, when they need a techically assute attack person to counteract. I have seen (and personally warned) banks that their images were being called remotely in phishing emails. Of the dozens, only one did anything about it (by putting "EMAIL FRAUD" in a gif and replacing it with the one in the site). Preventing remote linking of images on a web server is rediculously easy, yet the large hosts don't do it, and the banks that host their own sites dont know how. Just the simple step of not allowing remote image linking without the proper http-referrer header would stop a lot of phishers in their tracks.
Yet they don't do much...
So on that respect I think making the banks financially responsible (or their web host for that matter, many of them get free web sites with their online banking service or data service providers) would help a lot.
But at the same time, it's not their fault... so why should they have the financial duty to cover consumer's losses?
So if that's the only solution, it might be ok, otherwise people need to get a serious education boost.
This is where user education and organizational consistency come in. IIRC, PayPal does everything through www.paypal.com. If you've never, ever logged in somewhere other than that one site, you might be slightly suspicious to see mypaypalsecurity.com. And if every administrative message that really comes from PayPal has no links, you might notice something funny about the message that does have one. (It's not a cure-all, of course -- witness the number of successful "Apply this update from Microsoft!" trojans. But it'll make it easier for some people to spot the phish.)
Contrast this with, say, Citibank, which does some stuff through citibank.com, some through accountonline.com, I think has citicards.com and at one point was still using c2it.com. And I think they sometimes use third parties for email and redirectors. There's no consistency, so if you get something that says citibanklogin.com, you think "Oh, they've just added a new domain" and click/type it... and then you're on the fake site.
It's not that hard to make sure you're on the right site, make sure emails are legit, or login securely. All together, a pretty good system. Sure, you can still get tricked into entering your info elsewhere, but then you should probably not be banking online anyways.
Ok. As a guy that both works for banks and works for ISPs and deals with end users web sites and all that... I have to say I see a lot of willful ignorance on all sides.
Definitely agree with you there. The companies who can actually do something about internet crime seem to do the least about it. If you email a webhost, even a reputable one about a blatent phishing site that they are hosting, they will do absolutely fuck all for at least 24-48 hours while the site gets more victims. A site designed to look exactly like PayPal or whatever should be shut down immediately, considering that it can have no ligitimate purpose.
ISPs will happily let their customers continue to be connected to the internet even when they blatently have a virus attacking other hosts (in the form of excessive traffic out of port 139, 445 et all). And these same ISPs are the ones who supply the public with 2MBit DSL lines and no security software.
I think the poster has a point. I've not had a problem with my bank, but I did have a situation with a cellular phone company that issued an account in my name to someone who was pretending to be me. My conclusion from that experience was that the phone company was much too eager to open a new account without due diligence. Ultimately I didn't have to pay anything, but the experience was moderately expensive in terms of time and fees for certified mail, etc., and quite unpleasant. A simple legal principle something like "if you give someone who claims to be me some money, and it turns out not to have been me, too bad for you" is what I'd like to see. I think then we would see some real attention paid to the problem of securing transactions over the Internet and the POTS. Yes, I suppose this would make it more expensive for banks and others to do these transactions, but it seems that a reduction in fraud would make their overall expenses lower over time. Under the present system, much of the risk and frustration is borne by the consumer, who can do little to prevent fraud other than follow the boilerplate advice given out by government and commercial representatives.
Mac addresses can be faked and credit cards (and random number generators!) can be stolen.
Security in layers.. Spyware and keyloggers on my computer installed at random by a hole in IE is completely different from having that same spyware AND someone getting into my house and stealing my key generator (random number generator). I have incoming SSH allowed from outside, but only from 2 source ip addresses. I also force the use of existing authorized keys and passphrase only. Each of these is not fool proof but combined, it is magnatudes harder to hack into then running plain old telnet or SSH with no restrictions. Yes, if I was singled out and someone specifically wanted to hack into my specific computer, chances are they would find a way. Phishing attempts are exactly the opposite though, broadcasting out looking for the people that will bite the hook, not elaborate targetting of specific people. I am guessing here but I'd say bank account phishing successes would be 99.99% less with nothing more then a key fob number generator used as part of the password. I think the MAC would be useless for security as that can be taken from the same computer that the keylogger or phishing attempt originated from.
Thus, I disagree whole-heartedly. Law is the best safe-gaurd against criminals.
What world do you live in? Do you leave the keys in your car? Put the windows up? Leave the porch light on? Have an alarm in the car? Use a club? Shove your cds or cell phone under the seat? That is the same thing, security in layers. It is already illegal for someone to steal your car and the police already have the laws and power to catch criminals.
Bad boys rape our young girls but Violet gives willingly.
Sadly, if one of these fraudsters gets enough info on you, you may find that "you" are doing business with a bank you've never heard of with a line of credit you've never asked for ;)
Personally, I like how he thinks doing his investments in "person" keep him safe from fraud. Does he have a seat on a Stock Exchange or trusting a guy in an office hundreds of miles from an exchange who claims to represent an investment firm (CLUE: Ponzi schemes pre-date the internet)? Perhasp he invests directly in local businesses, where he carefully audits the books, and works as an "internet guy" from the back office, watching the cameras while using his voice translation software? Does he deal only in cash, never uses an ATM or checks?
I work in the anti-phishing industry, and suggestions like the article makes are pie in the sky "corporations have magic powers" crap. Make banks pay for phishing and you'll create a cottage industry of phishing victims, of the sort that plagues the insurance industry today.
You are in a maze of twisted little posts, all alike.
No, they're not. They're "give the problems to those with the money, sense and incentives to fix it" arguments. Makes excellent sense to me. My guess would be that you're either (a) too wrapped up in the "anti-phishing industry" to step back and wonder why we need such an industry; (b) invested too heavily in the "anti-phishing industry" to accept that it may not be needed; or (c) just not amenable to lateral thinking.
Seriously. Look at credit-card fraud. Do banks pay for this? Hell, yeah. Is there a cottage industry? Perhaps, but banks are EXTREMELY motivated to fix the problem, since it's costing them daily. Where five years ago was that CVV code on the back of your credit card? Where was "Verified by Visa"? These are industry programs introduced by the industry to reduce fraud. Why? Because it costs them.
Make phishing cost the industry, and you betcha they'll be right on it. And as far as I can tell, they wouldn't have to do much to top the efforts of the "anti-phishing industry" to date.
Make banks pay for phishing and you'll create a cottage industry of phishing victims, of the sort that plagues the insurance industry today.
Yes, unfortunately. Until the banks pull their collective heads out of their asses and implement security measures which actually work.
For instance, right now, all I need to withdraw money from my checking account is my ATM card (or the number from it) and a four digit PIN, which I didn't assign and can't change. I don't even need a name.
There are solutions out there to make this astronomically more difficult. For instance, give the customers smart cards which use a public key authentication system. No one can do anything without that card physically on hand, and it could be made tamper-resistant enough that it couldn't be copied -- meaning that if the card is stolen, you get a new one, which can reasonably be *much* harder to do than it is now (since there's more risk for the bank) -- show up with a driver's license, birth certificate, sign something, mention some secret password, and check your thumbprint.
Right now, we're nowhere near that. In fact, remember Diebold and the voting machines? They also make ATMs. A single vulnerability at the ATM or anywhere between it and the bank and someone can get the same access credentials you do -- whereas, which the scheme I mentioned, they actually have to steal your *physical* card.
Of course, if the bank itself isn't trustworthy, you're still screwed. But the bank has an incentive to be trustworthy -- if you suspect you've been ripped off anywhere, by a phisher or by the bank itself, they have to prove that they made you read sufficient literature (always hold on to your card, if someone takes it off your person for a transaction instead of letting you swipe it yourself, they're stealing) and provide enough documentation (your public key that they've got on file, plus all the transactions you've signed with that private key, and all the verification they have that it was you who signed up for the account....)
Because the burden of proof is now on the bank to prove that you weren't ripped off.
Will people try to abuse that? Yes, but it won't get them anywhere. Any bank worth its mortar should easily repel enough frivelous cases to discourage that kind of scammer.
Could we be more paranoid? Sure. Here's an example: make the card more universal, allow it to keep several identities (ATM, credit card, driver's license) which are all user-managed, and give it a built-in display and thumbprint reader. Basically, you jack the card (or dongle, or whatever) into their payment system, check the display ($1.25 to PepsiCo for Sierra Mist), then scan your thumb (in your own card) and it "signs" the sale. This also works online -- maybe the device is shaped like a USB keychain. It's still possible to be scammed on individual purchases, but you can't be scammed out of your entire identity -- if the most you ever spend on a single purchase is $50, no one scammer can steal more than $50 from you, unless you're amazingly stupid.
If you want, I can explain the crypto behind that scenario, but suffice to say that AFAIK, the only way the vending machine example breaks is the same way it already does -- you deposit money, push a button, and it doesn't actually deliver the Coke (or whatever) -- it "eats" your money. But it can't eat more than you put in.
So, this makes your banking almost as secure as cash. And cash is backed by the US government, so... uh oh....
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Look at credit-card fraud. Do banks pay for this? Hell, yeah. Is there a cottage industry? Perhaps, but banks are EXTREMELY motivated to fix the problem, since it's costing them daily
rubbish. Look at bank's current efforts to fix CC fraud.. CVV numbers that are relatively recent introduction for distance selling, and now chip and pin for cardholder-present frauds. Until very recently you didn't need to give the CVV number for authentication, and some of my cards *still* don't have chips on them.
The point here is that the banks are very conservative. They will first add up how much fraud costs them, figure out how much it will cost them to fix (including all the hidden costs like consultants and management and new readers for stores etc), and if the cost is too great, won't do a thing.