COMMENT Online crime is growing at breakneck speed while law enforcement, try as they might, have a hard time keeping up. Simon Moores reports on the state of cybercrime - and why it's so difficult to fight.
The quiet bombshell dropped by Alan Jebson, chief operating officer at HSBC Bank, appeared to go unnoticed by journalists at last week's e-Crime Congress in London.
In his keynote speech to 500 law enforcement, government and business leaders from around the world, Jebson suggested it would be reasonable to expect banks to provide online banking services only to those customers with a minimum standard of security, given many users' apparent unwillingness to take proper precautions against identity theft and other forms of online compromise.
Last week's survey figures released by the UK National Hi-tech Crime Unit (NHTCU) revealed that net crime cost businesses £2.45bn in the last 12 months. A growing proportion of that figure is now represented by fraud against financial institutions as a consequence of organised criminal gangs using remote access Trojans and other identity theft techniques to raid customers' bank accounts.
On a global basis, it's difficult to establish how much banks are now losing from identity theft but in the US Florida businessman Joe Lopez is reportedly suing 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, Lopez claims his bank is responsible for the theft because it failed to protect him properly from known online banking risks. The bank should have spotted such a large transfer winging its way towards a bank in one of the newest EU members, according to Lopez.
In the UK, high street banks continue to indemnify their customers against identity theft but many at the e-Crime Congress suggested their pain threshold is not infinite. Big business, too, 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.
The UK apparently leads the world in terms of 'bot nets', or collections of compromised computers that are rented out by criminal gangs. In March of 2004, German police uncovered a network of 476 hackers in 32 countries who had turned more than 11,000 computers into such 'zombies'. In September 2004 a Norwegian internet company shut down a bot-net controlling 10,000 machines. And SpamHaus estimates suggest 50,000 new zombie systems may be appearing each week.
This is likely to be a conservative estimate and my own guess, presented at the e-Crime Congress, is that between 5 and 10 per cent of the UK consumer computer population may be affected, with perhaps as many as 20 per cent carrying a virus at any one time.
So what's the solution? This year's e-Crime Congress revealed that while partnerships between law enforcement agencies are improving - witness the attendance 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 gangs cooperate across borders to steal and extort over the internet at unprecedented speed.
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 are hidden in offshore accounts. This money fuels other criminal ventures from paedophile pornography to drugs trafficking.
The reality facing internet societies is that crime pays - and 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 $1m 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. It does seem the concept of jurisdiction and the nation state has become relatively meaningless on the web.
As an observer, 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 they are too few as the online enemy keeps returning in ever greater numbers.
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1. Fred Bassett
The most obvious short term solution here is for ISP's to block IRC traffic unless the subscriber requests it's activated. My guess is that most 'bots' communicate with their 'controller' through IRC channels, and most users these days wouldn't know what IRC was if they were slapped by it.
ISP's can do a LOT more to secure up their customers but none are prepared to 'take the responsibility' of it all. The irony of it is, that if they did, the immediate drop in bandwidth requirements would fund their efforts for years to come.
Then of course there is the obvious 2 stage method of security that online banks could easily use to stamp out phishing, but so far none have. There's loads of companies that can provide them with cost effective solutions - www.validsoft.com is just one I can think of.
Computer security is solvable but no-one wants to 'pay for it'. Instead consumers pay for it, and trust erodes. It's time someone stood up and got something done instead of talking all the time - jeez, this 'threat' has been here for 10 years or more already, what's going on?