I read an article this morning about on-line banking fraud that was so awful it prompted me to dust off the Righteous IT blog and write about it. Sure, it’s a sponsored article from a financial industry site and not really journalism, so maybe I shouldn’t expect too much. But the problem is that the misinformation in this article– which is so typical of other articles related to on-line banking fraud– is actually hampering our ability to make the situation better.
Let’s start with the “money quote” in the article from F-Secure’s Sean Sullivan: “Last year there were more online bank robberies than there were actual on-site bank robberies.” You can be sure that this quote is going to get a lot of airplay on Twitter and in the popular press. I even understand what Sean is saying here– there were numerically more cases of on-line banking fraud than there were physical hold-ups at banking institutions. I might even believe this.
The problem with the quote is that it ignores one important point. When a real-world bank is held up, the bank’s insurance covers the cost of any losses. When a small business is the victim of on-line banking fraud, the bank is not legally obligated to make good the loss– a fact that is even noted later in the original article. The reality is that in on-line banking fraud, the bank is not the victim, their customers are. So while the quote is surely an attention-grabber, it ignores the critical fact that in the on-line world, the financial institutions have managed to transfer a whole lot of risk squarely into the laps of their customers.
The article goes on to extol the virtues of multi-factor authentication systems, including passwords, keys, security questions, personalized pictures, and so on. We even get another quote from Sean Sullivan: “The more layers you have before you get to your account, the safer you are.” Really? Then why does Sullivan also state in the same article, “Some more advanced types of Trojans can make fraudulent transfers and drain your account while you are logged on to the account online.”
The reality that banks may not want to admit right now is that readily available malware kits like Zeus are completely bypassing the bank’s on-line security protocols. This happens because the attacker has simply taken over the victim’s machine and is using the victim’s own credentials to conduct the fraudulent transactions. It doesn’t matter how many “layers” you have when the attackers own the victim’s system. To borrow Bruce Schneier’s phrase, all of those hoops that your on-line bank makes you jump through are not much more than “security theatre” at this point.
Finally there’s the standard wrap-up for an article of this type: the dreaded “How to Help Protect Your Account” list of bullet items. These lists always include advice on keeping your anti-virus/anti-spyware up-to-date and turning on auto-updates (it’s #2 in the list in this article). Well guess what? Perhaps more than half of the PCs infected with the Zeus banking malware had up-to-date virus signatures and patches.
And of course there’s the exhortation to “Use a strong password with letters and numbers combined.” How exactly is a strong password going to help you when the attackers learn what the password is as soon as you enter it into your web browser? Can we please stop suggesting that passwords– strong or otherwise– are going to help here?
At this point, I’m not sure there’s a way for normal users to achieve a reasonable level of security for on-line banking. The “attack surface” of a typical home computer is so vast that attackers will find a way to compromise the system. The best suggestion I’ve heard floated to date– using a dedicated computer for on-line banking— seems too expensive to be reasonable for home users, or even a typical small business (to say nothing of the inconvenience factor).
The bottom line is that current on-line security measures are not stopping thieves. We need to stop publishing articles that suggest that there is some magic litany of security steps an average user can take to make their on-line banking secure. If users were to abandon on-line banking– which is a huge money-saver for financial institutions compared to bricks and mortar branches with live tellers– you can bet that the banks might actually start working on some more effective security measures.
Similarly, as long as the banks can keep pushing their liability onto their customers, they have no incentive to fix the problem. We need more customers who are willing to go after their banks to recover their lost funds. Small business groups should agitate for the same sorts of protections that are afforded to individual accounts. By pushing the liability back onto the financial institutions, we make it more likely that the banks will actually spend their own money beefing up their on-line security measures and back-end fraud detection.