The Future of Phishing
by Dr. Jonathan Tuliani - UK Technical Manager for Cryptomathic Ltd. - Monday, 5 April 2004.
This article examines how attackers are likely to respond to the current move towards 2-factor authentication as a defence against phishing scams, and describes an alternative approach, available today, that provides a longer-term solution.

In recent months, newspaper and television reports have highlighted how highly-organised criminal gangs are launching large-scale, carefully planned attacks against high-street banks and other services, both in the UK and overseas. These so-called 'phishing' attacks begin with an email. Appearing to come from the bank, it leads the recipient to a convincing web page, at which point he is tricked into entering his username and password.

Of course the web page has been set up by the attacker and does not belong to the bank at all. Once obtained, these details are used by the attacker to log-in to the user's account and drain it of funds.

Surely, in an ideal world the user would realise that the web page is bogus - that's what SSL/TLS is all about, right? Unfortunately, a combination of browser flaws, DNS attacks, lack of control over root SSL certificates and the need to make systems user-friendly means that for most users, detecting a fraudulent web page is nigh-on impossible. Moreover, the economics of spam requires that only a very small percentage of users need to fall for the scam for it to be worthwhile.

The current industry trend to counter this threat is the introduction of stronger user authentication. For reasons of cost, mobility, ease of deployment and user acceptance, password-generating tokens are the most commonly adopted technology. These supply the user with a one-time-password, a random string of letters or digits that is valid only for a single use. The idea is that the attacker is thwarted since the one-time-password, once obtained, has already been used or has expired.

Password-generating tokens are offered by a variety of vendors. The password is generated cryptographically based on a key shared with the bank, and varied either by means of a clock, a counter value or a user-input challenge - perhaps even a combination of the three. The key may be internal to the token or a separate card and card reader may be used - the Association of Payment Clearing Services (APACS) has devised a scheme based on existing retail banking chip-cards and PINs. Each scheme has both advantages and disadvantages, and these must be considered and balanced in the context of the business requirements.

The history of security teaches us that it would be wrong to assume that the introduction of two-factor authentication will be the end of the story. Faced with additional security measures, we must assume that the attacks will evolve, and more advanced exploits will emerge. What might these be, and how might we prepare for or respond to them?

My firm belief is that the next few years will see the emergence of internet man-in-the-middle attacks. Here, the user is tricked exactly as described above, except that instead of just the user communicating with the attacker, the attacker is also communicating in real-time with the bank. Two (or even ten) factor authentication is of no help, since the attacker doesn't interfere with the log-in process. Both the user and the bank are unaware of the presence of the attacker, and believe they have a secure connection directly from one to the other.

Once established, the man-in-the-middle has complete control. He can modify instructions, for example transferring funds to a different account to that specified by the user. Most simply, he can simply cut the user off and submit whatever instructions he desires directly to the bank.


What's the real cost of a security breach?

The majority of business decision makers admit that their organisation will suffer an information security breach and that the cost of recovery could start from around $1 million.

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