Cybercrime takes on a new guise

An industry report on Justice prosecutions shows an increase in password fraud and endpoint attacks.

A new report has found that recent cybercrime-related prosecutions by the Justice Department have centered less on external attacks such as worms and viruses and more on the misuse of user names and passwords, log-on security breaches, and endpoint attacks.

“Most of the attacks where big damage is done all come from users who obtain a valid user ID and password,” said Bill Bosen, founding partner of Trusted Strategies, which was commissioned to produce the report. Such attacks occur intentionally when someone — say, a disgruntled employee — abuses his or her privileges or unintentionally when people fail to protect their user information and leave it exposed for external attackers.

The Aug. 28 report, “Network Attacks: Analysis of Department of Justice Prosecutions 1999-2006,” found that financial losses for the cases averaged about $3 million. Although the majority of attackers — 78 percent — committed crimes from their homes and did not have a relationship with the organization they attacked, some government cases included former federal computer security specialists. The government was the most frequent target of network attacks, according to the report.

“A very significant number of these crimes would have been prevented if device identity and user identity verification was present,” said Keren Cummins, public-sector vice president at Phoenix Technologies, which commissioned the report. The company makes endpoint security and device verification software called TrustConnector.

The report states that nearly 88 percent of the attacks were committed by accessing user accounts.

Bosen said part of the reason nontargeted attacks such as viruses and worms are declining is that cybercrime is changing from isolated, individual attacks for ego gratification or reputation building to targeted attacks against organizations for money. “Attacks are becoming more sophisticated in that there’s big money involved,” Bosen said.

Chris Painter, principal deputy chief of the computer crime and intellectual property section of the Criminal Division at Justice, said he agreed with Bosen’s conclusions.

“There’s been a merger between the very adept hackers and the less adept fraudsters and other criminals who use this as a new victim resource,” Painter said. The shift in targets is why higher-profile, multi-organization strikes such as viruses are no longer in style.

“It doesn’t behoove these people to have a lot of publicity,” he added.

Communications endpoints, such as wireless and Bluetooth connections and cell phones, will become targets of choice in the future, Bosen said.

“Organized crime is going to get better and better at finding laptop devices that have a hole in them,” he said.

Cummins said the report isn’t indicative of a cybercrime trend but is a good indicator of the scope of the threats that you would find “flipping through CNN.”

Painter said he agreed with Cummins that trends are difficult to spot in the report, partly because he does not think one can tally actual crimes based on the number of prosecutions.

“There are obviously prosecutions that haven’t been done by the department, but this doesn’t count the state and local prosecutions that are reported,” Painter said. A bigger problem, he added, is underreporting. He said companies and agencies have no motivation to mar their reputations by reporting a cybercrime. Many organizations would prefer to handle cases on their own, he said.

Facts about the Justice Department’s
cybercrime prosecutions

A new report on cybercrime found that 78 percent of all cybercrimes originated from the perpetrators’ home computers. It also found that:

  • The average financial loss was more than $3 million per case.

  • An attack could cause as much as $10 million in damages to individual organizations.

  • Organizations suffered the greatest financial loss and damages — more than $1.5 million per occurrence — when attackers used stolen IDs and passwords.

  • The largest financial damages to organizations occurred when attackers logged in to privileged user or administrator accounts on a limited number of computers.

  • About 84 percent of cybercrimes could have been prevented if an organization had been able to match the identity of a computer connecting to a network at the same time it checked the user ID and password.

  • Losses from stolen IDs and passwords far exceeded damages from worms, viruses and other attack methods not using log-on accounts.

Source: Trusted Strategies
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