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Deloitte Hacked

The large accountancy firm Deloitte was hacked, losing client e-mails and files. The hackers had access inside the company’s networks for months. Deloitte is doing its best to downplay the severity of this hack, but Bran Krebs reports that the hack “involves the compromise of all administrator accounts at the company as well as Deloitte’s entire internal email system.”

So far, the hackers haven’t published all the data they stole.

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Indiana's Voter Registration Data Is Frighteningly Insecure

You can edit anyone’s information you want:

The question, boiled down, was haunting: Want to see how easy it would be to get into someone’s voter registration and make changes to it? The offer from Steve Klink — a Lafayette-based public consultant who works mainly with Indiana public school districts — was to use my voter registration record as a case study.

Only with my permission, of course.

“I will not require any information from you,” he texted. “Which is the problem.”

Turns out he didn’t need anything from me. He sent screenshots of every step along the way, as he navigated from the “Update My Voter Registration” tab at the Indiana Statewide Voter Registration System maintained since 2010 at www.indianavoters.com to the blank screen that cleared the way for changes to my name, address, age and more.

The only magic involved was my driver’s license number, one of two log-in options to make changes online. And that was contained in a copy of every county’s voter database, a public record already in the hands of political parties, campaigns, media and, according to Indiana open access laws, just about anyone who wants the beefy spreadsheet.

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NSA Contractor Arrested for Stealing Classified Information

The NSA has another contractor who stole classified documents. It’s a weird story: “But more than a month later, the authorities cannot say with certainty whether Mr. Martin leaked the information, passed them on to a third party or whether he simply downloaded them.” So maybe a potential leaker. Or a spy. Or just a document collector.

My guess is that there are many leakers inside the US government, even more than what’s on this list from last year.

EDITED TO ADD (10/7): More information.

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The Cost of Cyberattacks Is Less than You Might Think

Interesting research from Sasha Romanosky at RAND:

Abstract: In 2013, the US President signed an executive order designed to help secure the nation’s critical infrastructure from cyberattacks. As part of that order, he directed the National Institute for Standards and Technology (NIST) to develop a framework that would become an authoritative source for information security best practices. Because adoption of the framework is voluntary, it faces the challenge of incentivizing firms to follow along. Will frameworks such as that proposed by NIST really induce firms to adopt better security controls? And if not, why? This research seeks to examine the composition and costs of cyber events, and attempts to address whether or not there exist incentives for firms to improve their security practices and reduce the risk of attack. Specifically, we examine a sample of over 12 000 cyber events that include data breaches, security incidents, privacy violations, and phishing crimes. First, we analyze the characteristics of these breaches (such as causes and types of information compromised). We then examine the breach and litigation rate, by industry, and identify the industries that incur the greatest costs from cyber events. We then compare these costs to bad debts and fraud within other industries. The findings suggest that public concerns regarding the increasing rates of breaches and legal actions may be excessive compared to the relatively modest financial impact to firms that suffer these events. Public concerns regarding the increasing rates of breaches and legal actions, conflict, however, with our findings that show a much smaller financial impact to firms that suffer these events. Specifically, we find that the cost of a typical cyber incident in our sample is less than $200 000 (about the same as the firm’s annual IT security budget), and that this represents only 0.4% of their estimated annual revenues.

The result is that it often makes business sense to underspend on cybersecurity and just pay the costs of breaches:

Romanosky analyzed 12,000 incident reports and found that typically they only account for 0.4 per cent of a company’s annual revenues. That compares to billing fraud, which averages at 5 per cent, or retail shrinkage (ie, shoplifting and insider theft), which accounts for 1.3 per cent of revenues.

As for reputational damage, Romanosky found that it was almost impossible to quantify. He spoke to many executives and none of them could give a reliable metric for how to measure the PR cost of a public failure of IT security systems.

He also noted that the effects of a data incident typically don’t have many ramifications on the stock price of a company in the long term. Under the circumstances, it doesn’t make a lot of sense to invest too much in cyber security.

What’s being left out of these costs are the externalities. Yes, the costs to a company of a cyberattack are low to them, but there are often substantial additional costs borne by other people. The way to look at this is not to conclude that cybersecurity isn’t really a problem, but instead that there is a significant market failure that governments need to address.

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Samsung Television Spies on Viewers

Earlier this week, we learned that Samsung televisions are eavesdropping on their owners. If you have one of their Internet-connected smart TVs, you can turn on a voice command feature that saves you the trouble of finding the remote, pushing buttons and scrolling through menus. But making that feature work requires the television to listen to everything you say. And what you say isn’t just processed by the television; it may be forwarded over the Internet for remote processing. It’s literally Orwellian.

This discovery surprised people, but it shouldn’t have. The things around us are increasingly computerized, and increasingly connected to the Internet. And most of them are listening.

Our smartphones and computers, of course, listen to us when we’re making audio and video calls. But the microphones are always there, and there are ways a hacker, government, or clever company can turn those microphones on without our knowledge. Sometimes we turn them on ourselves. If we have an iPhone, the voice-processing system Siri listens to us, but only when we push the iPhone’s button. Like Samsung, iPhones with the “Hey Siri” feature enabled listen all the time. So do Android devices with the “OK Google” feature enabled, and so does an Amazon voice-activated system called Echo. Facebook has the ability to turn your smartphone’s microphone on when you’re using the app.

Even if you don’t speak, our computers are paying attention. Gmail “listens” to everything you write, and shows you advertising based on it. It might feel as if you’re never alone. Facebook does the same with everything you write on that platform, and even listens to the things you type but don’t post. Skype doesn’t listen — we think — but as Der Spiegel notes, data from the service “has been accessible to the NSA’s snoops” since 2011.

So the NSA certainly listens. It listens directly, and it listens to all these companies listening to you. So do other countries like Russia and China, which we really don’t want listening so closely to their citizens.

It’s not just the devices that listen; most of this data is transmitted over the Internet. Samsung sends it to what was referred to as a “third party” in its policy statement. It later revealed that third party to be a company you’ve never heard of — Nuance — that turns the voice into text for it. Samsung promises that the data is erased immediately. Most of the other companies that are listening promise no such thing and, in fact, save your data for a long time. Governments, of course, save it, too.

This data is a treasure trove for criminals, as we are learning again and again as tens and hundreds of millions of customer records are repeatedly stolen. Last week, it was reported that hackers had accessed the personal records of some 80 million Anthem Health customers and others. Last year, it was Home Depot, JP Morgan, Sony and many others. Do we think Nuance’s security is better than any of these companies? I sure don’t.

At some level, we’re consenting to all this listening. A single sentence in Samsung’s 1,500-word privacy policy, the one most of us don’t read, stated: “Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party through your use of Voice Recognition.” Other services could easily come with a similar warning: Be aware that your e-mail provider knows what you’re saying to your colleagues and friends and be aware that your cell phone knows where you sleep and whom you’re sleeping with — assuming that you both have smartphones, that is.

The Internet of Things is full of listeners. Newer cars contain computers that record speed, steering wheel position, pedal pressure, even tire pressure — and insurance companies want to listen. And, of course, your cell phone records your precise location at all times you have it on — and possibly even when you turn it off. If you have a smart thermostat, it records your house’s temperature, humidity, ambient light and any nearby movement. Any fitness tracker you’re wearing records your movements and some vital signs; so do many computerized medical devices. Add security cameras and recorders, drones and other surveillance airplanes, and we’re being watched, tracked, measured and listened to almost all the time.

It’s the age of ubiquitous surveillance, fueled by both Internet companies and governments. And because it’s largely happening in the background, we’re not really aware of it.

This has to change. We need to regulate the listening: both what is being collected and how it’s being used. But that won’t happen until we know the full extent of surveillance: who’s listening and what they’re doing with it. Samsung buried its listening details in its privacy policy — they have since amended it to be clearer — and we’re only having this discussion because a Daily Beast reporter stumbled upon it. We need more explicit conversation about the value of being able to speak freely in our living rooms without our televisions listening, or having e-mail conversations without Google or the government listening. Privacy is a prerequisite for free expression, and losing that would be an enormous blow to our society.

This essay previously appeared on CNN.com.

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