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Our Finest Hour

The quiet bombshell dropped by Alan Jebson, Chief Operating Officer at HSBC Bank, appeared to go unnoticed by journalists at last week’s eCrime Congress in London.

In his keynote speech to five hundred law-enforcement, government and business leaders from around the world, Mr Jebson suggested that if end users were unwilling to take proper security precautions against the risk posed by identity theft and other forms of online compromise, then it would not be reasonable to expect banks to continue to provide those without a minimum standard with online banking services.

Last week’s survey figures released by the UK National Hi-tech Crime Unit (NHTCU) revealed that NetCrime had cost business £2.45 billion in the last twelve months. A growing proportion of that figure is now represented by fraud against financial institutions as a consequence of the activities of organised crime gangs using “Phishing” and “Pharming” Remote-Access Trojan (RAT) and other identity-theft techniques to raid consumer bank accounts.

On a global basis, it’s difficult to establish how much banks are now losing from identity theft but in the United States, one Joseph Lopez, is reportedly suing The Bank of America for the return of $90,000 he claims was stolen from his online banking account when he fell victim to a computer virus.

Taking an entirely different view to HSBC’s Jebson, Mr Joseph Lopez, the unhappy customer – and who wouldn’t be – claims that his bank is responsible for the theft because it failed to properly protect him from known online banking risks and should have spotted such a large transfer winging its way towards a Bank in one of the newest EU members, without considering it might be dodgy. It is estimated that as much as one-third to half of all cybercrime now originates with organised crime gangs in Russia, Eastern Europe and the Baltic nations.

In the UK, high street banks continue to indemnify their customers against identity theft but the eCrime Congress suggested that their pain threshold is not infinite and that big business shares a universal concern over the risk posed by a rapidly growing consumer market of over five million broadband users, whose average standard of security presents them with a clear and present danger.

Britain apparently leads the world in terms of “Bot net” computers. In fact, it’s more likely to be South Korea but Bot-nets are now a commodity that can be easily “rented” by criminal gangs in the equivalent of Internet supermarkets for as little as $60 for 6-hours, or $2,000 per week. In March of 2004, German police uncovered a network of 476 hackers in 32 countries who had turned more than 11,000 computers into “zombies”. In September 2004 a Norwegian internet company shut down a bot-net controlling 10,000 machines and Spamhaus estimates suggest that 50,000 new zombies may be appearing each week. This is likely to be a Conservative estimate and my own guess, presented at the eCrime Congress, is that between 5% and 10% of the UK consumer computer population may be affected, with perhaps as much as 20% carrying a virus at any one time.

This year’s eCrime Congress revealed that while partnerships between law enforcement agencies are improving; witness the presence at the conference of senior figures from the US Secret Service, FBI, Hong Kong Police and Russia’s MVD General Miroshnikov, the level of online crime continues to expand as organised crime gangs cooperate across borders to steal and extort over the internet in a way and with a speed that is unprecedented.

The Congress heard that the internet has given organised crime a profit margin that legitimate business can never expect to equal and that quite literally, hundreds of billions of dollars is hidden in offshore accounts, which is in turn fuelling other criminal ventures from paedophile pornography to drugs trafficking.

Crime syndicates across the world are banding together in informal alliances to hack into credit card databases, steal on-line banking details and extort businesses by threatening denial of service attacks, a senior detective will reveal today.

The reality facing internet societies is that crime pays and it pays extremely well. While law-enforcement is constrained by rules, budgets and jurisdictions, organised crime is not and while the one must seek to use Mutual Legal Assistance Treaties at the speed of 20th century bureaucracy, the other can traffic at Internet speeds.

A challenge yet to be solved is how to deal with one million people being robbed of $1 instead of one person being robbed of $1 million dollars? The opportunity of scale presented by the internet defies the resources of law enforcement and privately, many police officers may concede that the present model of international cooperation is in urgent need of revision and that the concept of jurisdiction and the nation state has become relatively meaningless on the World Wide Web.

From an observer’s point of view, it strikes me that one could apply all the resources of all the world’s police forces towards the fight against online crime and still only be treading water as the internet continues to expand. This may be law-enforcement’s finest hour but the few are too few and the online enemy keeps returning in ever greater numbers.


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