Researchers Demo Hack Against African Micro-Finance Accounts

mask.of.sanity writes "Security researchers have shown how to raid Africa micro-finance bank accounts en masse using fake audio one time passwords. The banks use audio one-time passwords to authenticate users logging into their accounts, but failed to implement properly security controls across numerous systems. Crucially, the researchers did not reveal how they cracked the encryption in order to protect users."

Comments

A *lot* of microfinance is just a scam

[crazyjj]

I know this is somewhat off-topic, but I was a big supporter of the whole micro-finance thing at one time myself. Sounds like a great idea and all, right? But then I saw former micro-financier Hugh Sinclair's BookTv segment and read his book and it opened my eyes to how much of this micro-finance fad has become a feeding ground for scammers, con men, and other vultures in the countries they're ostensibly supposed to be helping--and how much corruption there is in many of these "charitable" non-profits and financiers that sell the idea of micro-finance to well-meaning supporters.

Again, I know it's not directly related to the hack. But every time micro-finance comes up, I like to point out this info--since the vast majority of people still think of the subject in very naive and rosy terms, oblivious to the deep corruption that has become so pervasive in its execution.

Re:A *lot* of microfinance is just a scam

[Trepidity]

I think this is on a slightly different use of the term "microfinance", though there's overlap. The books you link are about microcredit specifically, a hyped-up approach to poverty reduction based on very small loans spread throughout a community, which Grameen Bank made famous. But the kind of microfinance this article talks about is more about regular banking: accounts and transactions, usually via a mobile phone. It's become popular in Africa because of the lack of traditional financial networks, and the increasing ubiquity of mobile phones as the main link into modern systems.