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Customers Accept Hacking Risks, But Hold Businesses Fully Accountable for Cyber Risk

While most consumers are coming to consider hacking normal, they are definitely far from letting businesses off the hook for their failures to guard against cyberthreats. According to a new study from enterprise security firm Centrify, about three quarters of adults say it is probably or definitely normal and expected for businesses and large organizations to be hacked, and 66% of adults in the U.S. are at least somewhat likely to stop doing business with a company that has suffered a cyberbreach – a figure that rises to 75% in the U.K.

Consumers also firmly believe that the burden of responsibility for guarding against cyberrisk falls squarely on businesses. On a 10-point scale, two thirds of respondents rated corporations as a nine or 10 in terms of how responsible they should be for preventing hacks and securing customers’ personal information. When companies are hacked, they consequently also bear the burden of being fully accountable to their customers, and many are failing, further compounding the odds of concrete consequences from clients. In the U.S., 41% said that corporations do not take enough responsibility when they are hacked, a sentiment shared by 50% of U.K. respondents.

The study found that 21% of U.S. consumers say they are “very likely” to stop doing business with a company that has been hacked. Those most likely to do so include those who have had their personal information compromised in a hack, those who are tech savvy, and those who are frequent online shoppers.

“The study clearly points to the need for organizations to dramatically bolster their security systems and do everything in their power to protect consumer information and prevent a breach,” said Tom Kemp, CEO of Centrify. “When companies put customer data at risk they are really putting their entire business at risk. Consumers simply will not tolerate doing business with hacked organizations. It’s time for organizations to take full responsibility for their security and put the proper measures in place once and for all.”

Check out some of the study’s findings in the infographic below:

Centrify Infographic

Top Obama Administration Officials, Law Enforcement Reach Out at RSA Conference

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Attorney General Loretta Lynch addresses RSA Conference 2016

SAN FRANCISCO—Many of the Obama administration’s top brass are here in force, addressing some 40,000 practitioners from every part of the technology and information security industry at the annual RSA Conference. Set against the backdrop of the ongoing fight over between Apple and the FBI encryption and backdoors, the tension ebbed and flowed during sessions with Attorney General Loretta Lynch, Secretary of Defense Ashton Carter, and Admiral Mike Rogers, U.S. Navy Commander, U.S. Cyber Command, and director of the NSA. While many speakers will not address the issue directly, the subtext is clear throughout the show, particularly as the public battle brings considerable interest to the privacy and security issues the RSA has centered on for 25 years.

Indeed, in his keynote address, RSA President Amit Yoran called law enforcement’s current stance on encryption “so misguided as to boggle the mind.” Brad Smith, president and chief legal officer of Microsoft, chimed in as well, asserting that we cannot keep people safe in the real world unless we can keep them safe in the virtual world. He lauded Apple and pledged that the tech giant would stand with Apple in its resistance.

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Secretary of Defense Ashton Carter in Conversation with Ted Schlein of Kleiner Perkins at RSA

While the gravity of the issue and the massive potential impact for many in the sector are boggling many minds here, the administration officials’ sessions also offered more broadly positive comments for businesses outside the tech sector. The conciliatory tone Lynch and Carter often struck centered on the critical need for partnerships between technology and government. They tried to emphasize the ways the administration is reaching out to private entities, both within Silicon Valley and across corporate America at large.

According to Sec. Carter, for example, the United States Cyber Command has three core missions: defending the Department of Defense’s network; helping American companies, the economy and critical infrastructure; and engaging in offensive cyber missions. The second is a key pillar, he said, as the DoD must keep in perspective that the strength of American entities is the strength of the nation. From threat intelligence to the Defense Innovation Unit Experimental he announced yesterday, to be helmed by Google’s Eric Schmidt, Carter believes there is considerable need for industry to engage with government on cyberrisk, and both parties have valuable assets to contribute. “Data security is a necessity, and we must help our companies harden themselves,” Carter said. Indeed, he wants both help for and from the industry. In closing, he said, “We are you. You pay us. We represent you and our job is to protect you, and we’d love to have your help.”

He also noted that the DoD is trying to learn a bit about managing its cyberrisk from the commercial sector’s best practices. “We do grade ourselves and we’re not getting good grades across the enterprise,” Carter told reporters Wednesday, according to Defense News. “I have these meetings where I call everyone in and we have these metrics which tell us how we’re doing [and] if you don’t score well, that is evident to the Secretary of Defense at those meetings.

“We don’t assume for a minute that we’re doing a perfect job at this,” he added. “That’s the whole reason for me to be here and the whole reason for me to be engaging with this community here at this conference.”

Carter also announced that the Department of Defense will be hosting “Hack the Pentagon,” a bug bounty program offering white hat hackers cash for finding and reporting vulnerabilities in the Pentagon’s websites. Many companies have been offering these programs to try to discover their exposure in a controlled setting, without the risk of reputation damage, personal information exposure and business interruption that accompany an unknown hacker finding them instead. Carter called these a “business best practice” to gauge preparedness.

Federal law enforcement also has a notable presence at RSA and is making a pronounced effort to reach out to businesses regarding cyberrisk, threat intelligence, and managing a cyberattack. Indeed, in one session Tuesday, panelists from the Department of Homeland Security, FBI and the White House urged a call to action for businesses to get serious about proactively building bridges with law enforcement and to make use of the many resources the administration is trying to activate to help private industry fortify against cyber threats. The government is working to make it easier for companies to turn to it for help, they said, and attitudes are shifting to more consistently recognize and respect victimized businesses and minimize business interruption.

Some in the audience expressed skepticism, such as one man who seized upon the Q&A portion of a session on government departments’ specific roles in fighting cyber criminals. He asked how the government can be trusted to help industry when it cannot protect itself. But corporate entities should be taking note, particularly of the services available. While many hesitate to share threat intelligence or even successful attacks, Eric Sporre, deputy assistant director of the FBI’s cyber division, stressed that FBI Director James Comey has made it a directive for FBI field offices to develop relationships with local businesses and to treat businesses as crime victims, not perpetrators. In responding to attacks, he noted, the Bureau sometimes even brings in victim services to holistically approach aiding in the investigation and recovery process.

Andy Ozment, assistant secretary for cybersecurity and communications at the Department of Homeland Security, also highlighted the preventative measures his department offers companies, including personal risk assessment services. In some cases, chief information security officers and other executives engaged in cyberrisk management functions have been getting DHS assessments, using them as a tool to drive investment or otherwise sell cyber upwards with the board or C-suite of their organizations.

The 25 Worst Passwords of 2015

In another reminder that users are always the biggest security weakness, “123456” and “password” have once again been named the most commonly used bad passwords.

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In SplashData’s fifth annual “Worst Passwords List,” the company has compiled the most common weak, easily guessable passwords that leave users vulnerable to hacking and identity theft.

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Pulling from more than 2 million leaked passwords revealed during the year, the list highlights just how vulnerable users are.

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Some new and longer passwords made the top 25, reflecting some effort by websites, system administrators and perhaps users themselves to try to force better security practices by requiring more characters. Unfortunately, these longer passwords are so simple that the extra characters mean little, particularly given how few passwords utilize both letters and numbers.

Some new bad passwords may seem a bit more complex, for example, “1234567890,” “1qaz2wsx” (first two columns of main keys on a standard keyboard), and “qwertyuiop” (top row of keys on a standard keyboard), but are easily guessableand clearly not quite as innovative as these users may have thought. It seems the excitement over Star Wars also had an impact: with common passwords “starwars,” “solo” and “princess,” the force of bad information security awakens.

Check out the infographic below for the top 25 worst passwords and some of SplashData’s top tips to build ones that stay off the list.

SplashData worst passwords of 2015

Prosecutors Reveal ‘Securities Fraud on Cyber Steroids’

The investigation into a huge cyberattack on JP Morgan Chase last year has exposed one of the largest computer hacking and fraud schemes to date.

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According to U.S. prosecutors, Gery Shalon, Joshua Samuel Aaron and Ziv Orenstein, all from Israel, hacked a total of 12 companies to expose the personal information of more than 100 million people, netting hundreds of millions of dollars in profit. The men face 23 criminal counts, including wire fraud, computer hacking, illegal internet gambling and money laundering, with alleged crimes targeting 12 companies, including nine financial services companies and media outlets including the Wall Street Journal. Investigators say their massive criminal empire used 75 shell companies that employed hundreds of people, and hacked seven major banks, ran an online casino, laundered money around the world and set up an illegal Bitcoin trading operation.

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“It is hacking in support of a diversified criminal conglomerate,” said Preet Bharara, U.S. attorney for the Southern District of New York. “In short, it is hacking as a business model.”

In addition to the hack of JP Morgan, which U.S. Attorney General Loretta Lynch called “the largest theft of customer data from a U.S. financial institution” and exposed the personal information of 83 million customers, the criminals also attacked E*Trade Financial Corp., TD Ameritrade, Scottrade Inc., Fidelity Investments and News Corp’s Dow Jones, which publishes the Wall Street Journal. The breaches date as far back as 2007.

“By any measure, the data breaches at these firms were breathtaking in scope and in size,” Bharara said. “This showcases a brave new world of hacking for profit.”

Breaking into these financial institutions gave the attackers information to target specific people, and gave them extra insight into the stock market. According to the indictment, they used the customer data to contact individuals and push them to buy stocks in order to manipulate their prices. In addition to the pump-and-dump scheme, sometimes the defendants reportedly engineered mergers with shell companies to create publicly traded stocks that could be manipulated.

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Bharara called the scheme “securities fraud on cyber steroids.”

Beginning in 2012, in addition to disguising payments and constantly obtaining new bank accounts, the men further tried to evade detection by hacking into a company that assessed merchant risk for credit-card issuers. The breach allowed the defendants to read employees’ emails and figure out how to sidestep the company’s efforts to monitor illegal payments, according to the indictment.

The defendants are also accused of operating at least 12 illegal internet casinos, even launching cyberattacks against rival gambling businesses to review executives’ email and gain a competitive edge. Shalon hacked competitors’ customer databases and directed denial of service attacks to shut down their businesses.

Several compliance officers may soon feel the heat as well: the investigation found that, in operating the online casinos and illegal pharmaceutical payment processing enterprises, the co-conspirators deceived financial institutions into processing and authorizing payments between the casino companies and others. “They colluded with corrupt international bank officials who willfully ignored its criminal nature in order to profit from, as a co-conspirator described it to Shalon, their payment processing ‘casino/software/pharmaceutical cocktail’,” the indictment charges.

According to prosecutors, the case illustrates the growing power of criminals and their tools, and makes such crimes particularly difficult to solve. But it may also highlight one key resource to do so: self-reporting to law enforcement. Officials credited JP Morgan’s early cooperation for helping to uncover the network of criminal activity. The firm came forward early on to share information with the government, a move many forensic investigators encourage.
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This case provides one of the clearest examples of why: hackers frequently use the same schemes to target a swath of companies in a given industry. While many companies worry about the reputational and regulatory risks of disclosing a breach to law enforcement, as hackers grow more sophisticated in their techniques and complex in their operations, it may prove an ever more critical step in the breach response and investigation process.

“Shalon, Aaron, and their co-conspirators allegedly robbed victim companies, often for months at a time, stealing the contact information of tens of millions of customers,” said FBI Assistant Director-in-Charge Diego Rodriguez. “They cloaked themselves in secrecy, but their methods rivaled those of the traditional masked robber. Today’s indictment sheds light on an increasingly complex threat. But just as criminals continue to develop relationships with one another in order to advance their objectives, the law enforcement community has developed a collaborative approach to fighting these types of crimes.”