Posts Tagged: credit lock


4
Oct 17

Fear Not: You, Too, Are a Cybercrime Victim!

Maybe you’ve been feeling left out because you weren’t among the lucky few hundred million or billion who had their personal information stolen in either the Equifax or Yahoo! breaches. Well buck up, camper: Both companies took steps to make you feel better today.

Yahoo! announced that, our bad!: It wasn’t just one billion users who had their account information filched in its record-breaking 2013 data breach. It was more like three billion (read: all) users. Meanwhile, big three credit bureau Equifax added 2.5 million more victims to its roster of 143 million Americans who had their Social Security numbers and other personal data stolen in a breach earlier this year. At the same time, Equifax’s erstwhile CEO informed Congress that the breach was the result of even more bone-headed security than was first disclosed.

To those still feeling left out by either company after this spate of bad news, I have only one thing to say (although I feel a bit like a broken record in repeating this): Assume you’re compromised, and take steps accordingly.

If readers are detecting a bit of sarcasm and cynicism in my tone here, it may be that I’m still wishing I’d done almost anything else today besides watching three hours worth of testimony from former Equifax CEO Richard Smith before lawmakers on a panel of the House Energy & Commerce Committee.

While he is no longer the boss of Equifax, Smith gamely agreed to submit to several day’s worth of grilling from legislators in both houses of Congress this week. It was clear from the questions that lawmakers didn’t ask in Round One, however, that Smith was far more prepared for the first batch of questioning than they were, and that the entire ordeal would amount to only a gentle braising.

Nevertheless, Smith managed to paint an even more dismal picture than was already known about the company’s failures to secure the very data that makes up the core of its business. Helpfully, Smith clarified early on in the hearing that the company’s customers are in fact banks and other businesses — not consumers.

Smith told lawmakers that the breach stemmed from a combination of technological error and a human error, casting it as the kind of failure that could have happened to anyone. In reality, the company waited 4.5 months (after it discovered the breach in late July 2017) to fix a dangerous security flaw that it should have known was being exploited on Day One (~March 6 or 7, 2017).

“The human error involved the failure to apply a software patch to a dispute portal in March 2017,” Smith said. He declined to explain (and lawmakers inexplicably failed to ask) how 145.5 million Americans — nearly 60 percent of the adult population of the United States — could have had their information tied up in a dispute portal at Equifax. “The technological error involved a scanner which failed to detect a vulnerability on that particular portal.”

As noted in this Wired.com story, Smith admitted that the data compromised in the breach was not encrypted:

When asked by representative Adam Kinzinger of Illinois about what data Equifax encrypts in its systems, Smith admitted that the data compromised in the customer-dispute portal was stored in plaintext and would have been easily readable by attackers. “We use many techniques to protect data—encryption, tokenization, masking, encryption in motion, encrypting at rest,” Smith said. “To be very specific, this data was not encrypted at rest.”

It’s unclear exactly what of the pilfered data resided in the portal versus other parts of Equifax’s system, but it turns out that also didn’t matter much, given Equifax’s attitude toward encryption overall. “OK, so this wasn’t [encrypted], but your core is?” Kinzinger asked. “Some, not all,” Smith replied. “There are varying levels of security techniques that the team deploys in different environments around the business.”

Smith also sought to justify the company’s historically poor breach response after it publicly disclosed the break-in on Sept. 7 — roughly 40 days after Equifax’s security team first became aware of the incident (on July 29). As many readers here are well familiar, KrebsOnSecurity likened that breach response to a dumpster fire — noting that it was perhaps the most haphazard and ill-conceived of any major data breach disclosure in history.

Smith artfully dodged questions of why the company waited so long to notify the public, and about the perception that Equifax sought to profit off of its own data breach. One lawmaker noted that Smith gave two public speeches in the second and third weeks of August in which he was quoted as saying that fraud was a “a huge opportunity for Equifax,” and that it was a “massive, growing business” for the company.

Smith interjected that he had “no indication” that consumer data was compromised at the time of the Aug. 11 speech. As for the Aug. 17 address, he said “we did not know how much data was compromised, what data was compromised.”

Follow-up questions from lawmakers on the panel revealed that Smith didn’t ask for a briefing about what was then allegedly only classified internally as “suspicious activity” until August 15, almost two weeks after the company hired outside cybersecurity experts to examine the issue.

Smith also maneuvered around questions about why Equifax chose to disclose the breach on the very day that Hurricane Irma was dominating front-page news with an imminent landfall on the eastern seaboard of the United States.

However, Smith did blame Irma in explaining why the company’s phone systems were simply unable to handle the call volume from U.S. consumers concerned about the Category Five data breach, saying that Irma took down two of Equifax’s largest call centers days after the breach disclosure. He said the company handled over 420 million consumer visits to the portal designed to help people figure out whether they were victimized in the breach, underscoring how so many American adults were forced to revisit the site again and again because it failed to give people consistent answers about whether they were affected. Continue reading →


29
Sep 17

Here’s What to Ask the Former Equifax CEO

Richard Smith — who resigned as chief executive of big-three credit bureau Equifax this week in the wake of a data breach that exposed 143 million Social Security numbers — is slated to testify in front of no fewer than four committees on Capitol Hill next week. If I were a lawmaker, here are some of the questions I’d ask when Mr. Smith goes to Washington.

capitol

Before we delve into the questions, a bit of background is probably in order. The new interim CEO of Equifax — Paulino do Rego Barros Jr. — took to The Wall Street Journal and other media outlets this week to publish a mea culpa on all the ways Equifax failed in responding to this breach (the title of the op-ed in The Journal was literally “I’m sorry”).

“We were hacked,” Barros wrote. “That’s the simple fact. But we compounded the problem with insufficient support for consumers. Our website did not function as it should have, and our call center couldn’t manage the volume of calls we received. Answers to key consumer questions were too often delayed, incomplete or both.”

Barros stated that Equifax was working to roll out a new system by Jan. 31, 2018 that would let consumers “easily lock and unlock access to their Equifax credit files.”

“You will be able to do this at will,” he continued. “It will be reliable, safe, and simple. Most significantly, the service will be offered free, for life.”

I have argued for years that all of the data points needed for identity thieves to open new lines of credit in your name and otherwise ruin your credit score are available for sale in the cybercrime underground. To be certain, the Equifax breach holds the prospect that ID thieves could update all that stolen data with newer records. I’ve argued that the only sane response to this sorry state of affairs is for consumers to freeze their files at the bureaus, which blocks potential creditors — and ID thieves — from trashing your credit file and credit score.

Equifax is not the only bureau promoting one of these lock services. Since Equifax announced its breach on Sept. 7, big-three credit bureaus Trans Union and Experian have worked feverishly to steer consumers seeking freezes toward these locks instead, arguing that they are easier to use and allow consumers to lock and unlock their credit files with little more than the press of a button on a mobile phone app. Oh, and the locks are free, whereas the bureaus can (and do) charge consumers for placing and/or thawing a freeze (the laws freeze fee laws differ from state to state).

CREDIT FREEZE VS. CREDIT LOCK

My first group of questions would center around security freezes or credit freezes, and the difference between those and these credit lock services being pushed hard by the bureaus.

Currently, even consumer watchdog groups say they are uncertain about the difference between a freeze and a lock. See this press release from Thursday by U.S. PIRG, the federation of state Public Interest Research Groups, for one such example.

Also, I’m curious to know what percentage of Americans had a freeze prior to the breach, and how many froze their credit files (or attempted to do so) after Equifax announced the breach. The answers to these questions may help explain why the bureaus are now massively pushing their new credit lock offerings (i.e., perhaps they’re worried about the revenue hit they’ll take should a significant percentage of Americans decide to freeze their credit files).

I suspect the pre-breach number is less than one percent. I base this guess loosely on some data I received from the head of security at Dropbox, who told KrebsOnSecurity last year that less than one percent of its user base of 500 million registered users had chosen to turn on 2-factor authentication for their accounts. This extra security step can block thieves from accessing your account even if they steal your password, but many consumers simply don’t take advantage of such offerings because either they don’t know about them or they find them inconvenient.

Bear in mind that while most two-factor offerings are free, most freezes involve fees, so I’d expect the number of pre-breach freezers to be a fraction of one percent. However, if only one half of one percent of Americans chose to freeze their credit files before Equifax announced its breach — and if the total number of Americans requesting a freeze post-breach rose to, say, one percent — that would still be a huge jump (and potentially a painful financial hit to Equifax and the other bureaus).

creditfreeze

So without further ado, here are some questions I’d ask on the topic of credit locks and freezes:

-Approximately how many credit files on Americans does Equifax currently maintain?

-Prior to the Equifax breach, approximately how many Americans had chosen to freeze their credit files at Equifax?

-Approximately how many total Americans today have requested a freeze from Equifax? This should include the company’s best estimate on the number of people who have requested a freeze but — because of the many failings of Equifax’s public response cited by Barros — were unable to do so via phone or the Internet.

-Approximately how much does Equifax charge each time the company sells a credit check (i.e., a bank or other potential creditor performs a “pull” on a consumer credit file)?

-On average, how many times per year does Equifax sell access to consumer’s credit file to a potential creditor?

-Mr. Barros said Equifax will extend its offer of free credit freezes until the end of January 2018. Why not make them free indefinitely, just as the company says it plans to do with its credit lock service?

-In what way does a consumer placing a freeze on their credit file limit Equifax’s ability to do business?

-In what way does a consumer placing a lock on their credit file limit Equifax’s ability to do business?

-If a lock accomplishes the same as a freeze, why create more terminology that only confuses consumers?

-By agreeing to use Equifax’s lock service, will consumers also be opting in to any additional marketing arrangements, either via Equifax or any of its partners? Continue reading →


24
Sep 17

Equifax or Equiphish?

More than a week after it said most people would be eligible to enroll in a free year of its TrustedID identity theft monitoring service, big three consumer credit bureau Equifax has begun sending out email notifications to people who were able to take the company up on its offer. But in yet another security stumble, the company appears to be training recipients to fall for phishing scams.

Some people who signed up for the service after Equifax announced Sept. 7 that it had lost control over Social Security numbers, dates of birth and other sensitive data on 143 million Americans are still waiting for the promised notice from Equifax. But as I recently noted on Twitter, other folks have received emails from Equifax over the past few days, and the messages do not exactly come across as having emanated from a company that cares much about trying to regain the public’s trust.

Here’s a redacted example of an email Equifax sent out to one recipient recently:

equifaxcare

As we can see, the email purports to have been sent from trustedid.com, a domain that Equifax has owned for almost four years. However, Equifax apparently decided it was time for a new — and perhaps snazzier — name: trustedidpremier.com.

The above-pictured message says it was sent from one domain, and then asks the recipient to respond by clicking on a link to a completely different (but confusingly similar) domain.

My guess is the reason Equifax registered trustedidpremier.com was to help people concerned about the breach to see whether they were one of the 143 million people affected (for more on how that worked out for them, see Equifax Breach Response Turns Dumpster Fire). I’d further surmise that Equifax was expecting (and received) so much interest in the service as a result of the breach that all the traffic from the wannabe customers might swamp the trustedid.com site and ruin things for the people who were already signed up for the service before Equifax announced the breach on Sept. 7.

The problem with this dual-domain approach is that the domain trustedidpremier.com is only a few weeks old, so it had very little time to establish itself as a legitimate domain. As a result, in the first few hours after Equifax disclosed the breach the domain was actually flagged as a phishing site by multiple browsers because it was brand new and looked about as professionally designed as a phishing site.

What’s more, there is nothing tying the domain registration records for trustedidpremier.com to Equifax: The domain is registered to a WHOIS privacy service, which masks information about who really owns the domain (again, not exactly something you might expect from an identity monitoring site). Anyone looking for assurances that the site perhaps was hosted on Internet address space controlled by and assigned to Equifax would also be disappointed: The site is hosted at Amazon.

While there’s nothing wrong with that exactly, one might reasonably ask: Why didn’t Equifax just send the email from Equifax.com and host the ID theft monitoring service there as well? Wouldn’t that have considerably lessened any suspicion that this missive might be a phishing attempt?

Perhaps, but you see while TrustedID is technically owned by Equifax Inc., its services are separate from Equifax and its terms of service are different from those provided by Equifax (almost certainly to separate Equifax from any consumer liability associated with its monitoring service).

THE BACKSTORY

What’s super-interesting about trustedid.com is that it didn’t always belong to Equifax. According to the site’s Wikipedia page, TrustedID Inc. was purchased by Equifax in 2013, but it was founded in 2004 as an identity protection company which offered a service that let consumers automatically “freeze” their credit file at the major bureaus. A freeze prevents Equifax and the other major credit bureaus from selling an individual’s credit data without first getting consumer consent.

By 2006, some 17 states offered consumers the ability to freeze their credit files, and the credit bureaus were starting to see the freeze as an existential threat to their businesses (in which they make slightly more than a dollar each time a potential creditor — or ID thief — asks to peek at your credit file).

Other identity monitoring firms — such as LifeLock — were by then offering services that automated the placement of identity fraud controls — such as the “fraud alert,” a free service that consumers can request to block creditors from viewing their credit files.

[Author’s note: Fraud alerts only last for 90 days, although you can renew them as often as you like. More importantly, while lenders and service providers are supposed to seek and obtain your approval before granting credit in your name if you have a fraud alert on your file, they are not legally required to do this — and very often don’t.]

Anyway, the era of identity monitoring services automating things like fraud alerts and freezes on behalf of consumers effectively died after a landmark lawsuit filed by big-three bureau Experian (which has its own storied history of data breaches). In 2008, Experian sued LifeLock, arguing its practice of automating fraud alerts violated the Fair Credit Reporting Act.

In 2009, a court found in favor of Experian, and that decision effectively killed such services — mainly because none of the banks wanted to distribute them and sell them as a service anymore. Continue reading →


20
Sep 17

Equifax Breach: Setting the Record Straight

Bloomberg published a story this week citing three unnamed sources who told the publication that Equifax experienced a breach earlier this year which predated the intrusion that the big-three credit bureau announced on Sept. 7. To be clear, this earlier breach at Equifax is not a new finding and has been a matter of public record for months. Furthermore, it was first reported on this Web site in May 2017.

equihaxIn my initial Sept. 7 story about the Equifax breach affecting more than 140 million Americans, I noted that this was hardly the first time Equifax or another major credit bureau has experienced a breach impacting a significant number of Americans.

On May 17, KrebsOnSecurity reported that fraudsters exploited lax security at Equifax’s TALX payroll division, which provides online payroll, HR and tax services.

That story was about how Equifax’s TALX division let customers who use the firm’s payroll management services authenticate to the service with little more than a 4-digit personal identification number (PIN).

Identity thieves who specialize in perpetrating tax refund fraud figured out that they could reset the PINs of payroll managers at various companies just by answering some multiple-guess questions — known as “knowledge-based authentication” or KBA questions — such as previous addresses and dates that past home or car loans were granted.

On Tuesday, Sept. 18, Bloomberg ran a piece with reporting from no fewer than five journalists there who relied on information provided by three anonymous sources. Those sources reportedly spoke in broad terms about an earlier breach at Equifax, and told the publication that these two incidents were thought to have been perpetrated by the same group of hackers.

The Bloomberg story did not name TALX. Only post-publication did Bloomberg reporters update the piece to include a statement from Equifax saying the breach was unrelated to the hack announced on Sept. 7, and that it had to do with a security incident involving a payroll-related service during the 2016 tax year.

I have thus far seen zero evidence that these two incidents are related. Equifax has said the unauthorized access to customers’ employee tax records (we’ll call this “the March breach” from here on) happened between April 17, 2016 and March 29, 2017.

The criminals responsible for unauthorized activity in the March breach were participating in an insidious but common form of cybercrime known as tax refund fraud, which involves filing phony tax refund requests with the IRS and state tax authorities using the personal information from identity theft victims.

My original report on the March breach was based on public breach disclosures that Equifax was required by law to file with several state attorneys general.

Because the TALX incident exposed the tax and payroll records of its customers’ employees, the victim customers were in turn required to notify their employees as well. That story referenced public breach disclosures from five companies that used TALX, including defense contractor giant Northrop Grumman; staffing firm Allegis GroupSaint-Gobain Corp.; Erickson Living; and the University of Louisville.

When asked Tuesday about previous media coverage of the March breach, Equifax pointed National Public Radio (NPR) to coverage in KrebsonSecurity.

One more thing before I move on to the analysis. For more information on why KBA is a woefully ineffective method of stopping fraudsters, see this story from 2013 about how some of the biggest vendors of these KBA questions were all hacked by criminals running an identity theft service online.

Or, check out these stories about how tax refund fraudsters used weak KBA questions to steal personal data on hundreds of thousands of taxpayers directly from the Internal Revenue Service‘s own Web site. It’s probably worth mentioning that Equifax provided those KBA questions as well.

ANALYSIS

Over the past two weeks, KrebsOnSecurity has received an unusually large number of inquiries from reporters at major publications who were seeking background interviews so that they could get up to speed on Equifax’s spotty security history (sadly, Bloomberg was not among them).

These informational interviews — in which I agree to provide context and am asked to speak mainly on background — are not unusual; I sometimes field two or three of these requests a month, and very often more when time permits. And for the most part I am always happy to help fellow journalists make sure they get the facts straight before publishing them.

But I do find it slightly disturbing that there appear to be so many reporters on the tech and security beats who apparently lack basic knowledge about what these companies do and their roles in perpetuating — not fighting — identity theft.

It seems to me that some of the world’s most influential publications have for too long given Equifax and the rest of the credit reporting industry a free pass — perhaps because of the complexities involved in succinctly explaining the issues to consumers. Indeed, I would argue the mainstream media has largely failed to hold these companies’ feet to the fire over a pattern of lax security and a complete disregard for securing the very sensitive consumer data that drives their core businesses.

To be sure, Equifax has dug themselves into a giant public relations hole, and they just keep right on digging. On Sept. 8, I published a story equating Equifax’s breach response to a dumpster fire, noting that it could hardly have been more haphazard and ill-conceived.

But I couldn’t have been more wrong. Since then, Equifax’s response to this incident has been even more astonishingly poor.

EQUIPHISH

On Tuesday, the official Equifax account on Twitter replied to a tweet requesting the Web address of the site that the company set up to give away its free one-year of credit monitoring service. That site is https://www.equifaxsecurity2017.com, but the company’s Twitter account told users to instead visit securityequifax2017[dot]com, which is currently blocked by multiple browsers as a phishing site.

equiphish

Continue reading →