Real-Time Keyloggers
The NY Times has a story and a blog backgrounder focusing on a weapon now being wielded by bad guys (most likely in Eastern Europe, according to the Times): Trojan horse keyloggers that report back in real-time. The capability came to light in a court filing (PDF) by Project Honey Pot against "John Doe" thieves. The case was filed in order to compel the banks — which are almost as secretive as the cyber-crooks — to reveal information such as IP addresses that could lead back to the miscreants. Or at least allow victims to be notified. Real-time keyloggers were first discovered in the wild last year, but the court filing and the Times article should bring new attention to the threat. The technique menaces the 2-factor authentication that some banks have instituted: "By going real time, hackers now can get around some of the roadblocks that companies have put in their way. Most significantly, they are now undeterred by systems that create temporary passwords, such as RSA's SecurID system, which involves a small gadget that displays a six-digit number that changes every minute based on a complex formula. If [your] computer is infected, the Trojan zaps your temporary password back to the waiting hacker who immediately uses it to log onto your account. Sometimes, the hacker logs on from his own computer, probably using tricks to hide its location. Other times, the Trojan allows the hacker to control your computer, opening a browser session that you can't see."
The one time pad means they can't open a second session.
RSA secure-id keys are single-use too. They roll every minute but they also roll on every successful use.
When information is power, privacy is freedom.
Bank of America used to have a good system for authenticating their site. At login, you input your ID, and the B of A site gave you back a photo of your own choosing to tell you that you were on the real Bank of America site. Only then did you input your password.
Last Friday, B of A broke this feature. I'm now getting a password prompt without seeing the photo I'd chosen. My first thought was that there's was a security problem. I checked the SSL cert info, which looked OK. I reinstalled Firefox. No change. I called Bank of America. They wanted me to remove Flash, which I did. No change. They advised me not to log in. Then they passed me off to tech support, which hasn't called back yet.
Then I took out a Linux-based Eee PC 2G Surf that had been unused for months, powered it up, plugged in an Ethernet cable, and saw the site doing exactly the same thing. So it's probably not a client side problem.
What I think happened is that someone at B of A did a partial site redesign and broke something. They introduced some Flash (something called "/sas/sas-docs/html/pmfso.swf") on the password page (a terrible idea, given Flash's history of security vulnerabilities) and along with that, broke some part of the login process.
If, in fact, they've had a break in on the server side, the main login of Bank of America has been compromised for at least three days now. I'm not seeing any indication of that, though; just general ineptitude.
(The page HTML is awful. It's clearly been modified over and over for years without a cleanup. It has Flash, Javascript, CSS, single-pixel GIFs for formatting, and comments like "July maintenance OLB timeout inactivity update starts". The "enter password" page has 966 lines of HTML and JavaScript, not including external files. That's too much flaky machinery for such a security-critical function.)
An alternative used by at least one bank in Australia is that when you request a transaction they send ans sms to your pre-authenticated mobile number detailing the transaction, i.e who to and how much, and giving an authorisation code that you then enter. That code only authorises that specific transaction.
That's common in Europe too. But the result has been that hacking sms in various ways has become of great interest to thieves. If they don't already exist, you can count on seeing java trojans for cells phones that silently forward SMS too.
When information is power, privacy is freedom.
When you authenticate successfully with a passcode the passcode is immediately invalidated and cannot be used again. You cannot complete a login then use the same passcode again. At my old company we had to request special 30-second fobs for this reason. People would connect to a machine using their passcode and then need to su to root, but had to wait for the code on the token to change before they could authenticate again. If an attacker captures your passcode after you use it to successfully log in it's not going to do them any good at all. I feel like I'm missing something because none of the comments that I read above mention this fact. Pretty basic stuff to anyone who has administrated the system before.