WSJ: Federal Prosecutors investigate smartphone apps

If you have kept up with the excellent Wall Street Journal series on smartphone apps that inappropriately collect and release location information, you won't be surprised at their latest chapter:  Federal Prosecutors are now investigating information-sharing practices of mobile applications, and a Grand Jury is already issuing subpoenas.  The Journal says, in part:

Federal prosecutors in New Jersey are investigating whether numerous smartphone applications illegally obtained or transmitted information about their users without proper disclosures, according to a person familiar with the matter…

The criminal investigation is examining whether the app makers fully described to users the types of data they collected and why they needed the information—such as a user's location or a unique identifier for the phone—the person familiar with the matter said. Collecting information about a user without proper notice or authorization could violate a federal computer-fraud law…

Online music service Pandora Media Inc. said Monday it received a subpoena related to a federal grand-jury investigation of information-sharing practices by smartphone applications…

In December 2010, Scott Thurm wrote Your Apps Are Watching You,  which has now been “liked” by over 13,000 people.  It reported that the Journal had tested 101 apps and found that:

… 56 transmitted the phone's unique device identifier to other companies without users’ awareness or consent.  Forty-seven apps transmitted the phone's location in some way. Five sent a user's age, gender and other personal details to outsiders.  At the time they were tested, 45 apps didn't provide privacy policies on their websites or inside the apps.

In Pandora's case, both the Android and iPhone versions of its app transmitted information about a user's age, gender, and location, as well as unique identifiers for the phone, to various advertising networks. Pandora gathers the age and gender information when a user registers for the service.

Legal experts said the probe is significant because it involves potentially criminal charges that could be applicable to numerous companies. Federal criminal probes of companies for online privacy violations are rare…

The probe centers on whether app makers violated the Computer Fraud and Abuse Act, said the person familiar with the matter. That law, crafted to help prosecute hackers, covers information stored on computers. It could be used to argue that app makers “hacked” into users’ cellphones.

[More here]

The elephant in the room is Apple's own approach to location information, which should certainly be subject to investigation as well.   The user is never presented with a dialog in which Apple's use of location information is explained and permission is obtained.  Instead, the user's agreement is gained surreptitiously, hidden away  on page 37 of a 45 page policy that Apple users must accept in order to use… iTunes.  Why iTunes requires location information is never explained.  The policy simply states that the user's device identifier and location are non-personal information and that Apple “may collect, use, transfer, and disclose non-personal information for any purpose“.

Any purpose?

Is it reasonable that companies like Apple can  proclaim that device identifiers and location are non-personal and then do whatever they want with them?  Informed opinion seems not to agree with them.  The International Working Group on Data Protection in Telecommunications, for example, asserted precisely the opposite as early as 2004.  Membership of the Group included “representatives from Data Protection Authorities and other bodies of national public administrations, international organisations and scientists from all over the world.”

More empirically, I demonstrated in Non-Personal information, like where you live that the combination of device identifier and location is in very many cases (including my own) personally identifying.  This is especially true in North America where many of us live in single-family dwellings.

[BTW, I have not deeply investigated the approach to sharing of location information taken by other smartphone providers – perhaps others can shed light on this.]

Where is your identity more likely to be stolen?

 From the Economist:

Internet users in Britain are more likely to fall victim to identity theft than their peers elsewhere in Europe and North America. In a recent survey of 6,000 online shoppers in six countries by PayPal and Ipsos Research, 14% of respondents in Britain said that they have had their identities stolen online, compared with only 3% in Germany. More than half of respondents said that they used personal dates and names as passwords, making it relatively easy for scammers to gain access to accounts. The French are particularly cavalier, with two-thirds using easily guessed passwords and over 80% divulging personal data, such as birthdays, on social-networking sites.

Of course, my identity was stolen (and apparently sold) NOT because of inadequate password hygiene, but just because I was dealing with Countrywide – a company whose computer systems were sufficiently misdesigned to be vulnerable to a large-scale insider attack.  So there are a lot of things to fix before we get to a world of trustworthy computing.


The Emperor's new clothes

The UK's Register has been running a a series of articles by John Leyden  (here, here and here) about Verified By Visa. (VByV)  Verified By Visa uses the same kind of “site redirection” I've written about many times with respect to OpenID and other password-based federation technologies – but in this case it is a banking password that can be stolen.

The phishing scenario is simple enough.  If you happen onto an “evil” site and are tricked into purchasing something, it can “misdirect” your browser to a counterfeit VByV signon page.  As John explains, you have little chance, as a user, of knowing you are being duped, but once you enter your password it is available to the evil site for both instant use an future reuse.  Those familiar with this site will understand that this is yet another example of an attack that cannot be made against Information Card users.

Beyond focussing attention on the phishing problems inherent in “site redirection” approaches, John argues that the system – though claiming to be more secure – is actually just as vulnerable as non-VByV mechanisms.  He then argues – and I have know knowledge as to whether this is the case – that the false claims about increased security are being used to reject complaints by end-users about irregularities and fraudulent purchases made in their name.  If that were true, it would be scandalous.

Friends, this is a case of “The Writing on the Wall”.  I think people in the industry should see John's work as a sign of what's to come.   He is the guy in the fable who is shouting out that “the Emperor has no clothes!”  And he's doing it cogently to the wide readership of the Register.

If I were an advisor to the emperor at this point I would insist on two things: 

  1. admit the vulnerability of all systems based on “site redirection”; and
  2. start getting into phishing-resistant technologies like Information Cards while one's modesty can still be protected.

John makes his points without the stench of jargon.  In spite of this, North American readers will require a dictionary to follow what he's saying (I did).  I'm talking here about a dictionary of British idioms (thanks to my friend Richard Turner for boosting my vocabulary on this one) :

punter n guy. A punter is usually a customer of some sort (the word originally meant someone who was placing bets at a racecourse)…

To see a bit of what mainstream press worldwide will be writing about as the paucity of redirection technology for long-tail scenarios is concerned, I do suggest looking first hand at these articles.  One small taste:

Both Verified by Visa (VbyV) and MasterCard's equivalent SecureCode service are marketed as offering extra security checks to online purchases. Importantly, the schemes also transfer liability for bogus transactions away from merchants who use the system back towards banks (and perhaps ordinary e-commerce punters).

Online shoppers who buy goods and service with participating retailers are asked to submit a VbyV or SecureCode password to authorise transactions. These additional checks are typically submitted via a website affiliated to a card-issuing bank but with no obvious connection to a user's bank.

Punters aren't informed up front that a merchant has signed up to Verified by Visa. Sites used to authenticate a VbyV or SecureCode password routinely deliver a dialogue box using a pop-up window or inline frame, making it difficult to detect whether or not a site is genuine.

The appearance of phishing attacks hunting for Verified by Visa passwords are among the reasons some punters are wary of the technology.

Once obtained by fraudsters, either by direct phishing attack or through other more subtle forms of social engineering trickery, VbyV login credentials make it easier for crooks to make purchases online while simultaneously making it harder for consumers to deny responsibility for a fraudulent transaction…

The little-publicised mandatory use of the technology by some banks means that those with reservations have an uphill struggle to opt out of the scheme…

Verified by Visa and Mastercard SecureCode are there purely to protect the banks, not the card holder. They offer zero additional protection to the consumer, but allow the bank to claim that transactions using purloined credit card credentials were really made by the card holder. It is as simple as that.

[More here}.


Are Countrywide's systems designed around need to know?

I'm mad as hell and I'm not taking it any more

It was inevitable, given how sloppy many companies are when handling the identity of their customers, that someone would eventually steal all my personal information.  But no matter how much science you have in your back pocket, it hurts when you get slapped in the face.

The theory is clear:  systems must be built to withstand being breached.  But they often aren't.

One thing for sure: the system used at Countrywide Mortgage was so leaky that when I phoned my bank to ask how I should handle the theft, my advisor said, “I don't know.  I'm trying to figure that out, since my information was stolen too.”  We commiserated.  It's not a good feeling.

And then we talked about the letter.

What a letter.  It is actually demented.  It's as though Countrywide's information systems didn't exist, and weren't a factor in any insider misbehavior. 

I agree there was a bad employee.  But is he the only guilty party?  Was the system set up so employees could only get at my personal information when there was a need to know

Was the need to know documented?  Was there a separation of duties?  Was there minimization of data?  Can I see the audit trails?  What was going on here?  I want to know.

My checks rolled in to Countrywide with scientific precision.  No one needed to contact me through emergency channels.  Why would anyone get access to my personal information?  Just on a whim?  

How many of us were affected?  We haven't been told.  I want to know.  Iit bears on need to know and storage technologies.

But I'm ahead of myself.  I'll share the letter, sent by Sheila Zuckerman on behalf of “the President” (“President” who??).

We are writing to inform you that we recently became aware-that a Countrywide employee (now former) may have sold unauthorized personal information about you to a third party. Based on a joint investigation conducted by Countrywide and law enforcement authorities, it was determined that the customer information involved in this incident included your name, address, Social Security number, mortgage loan number, and various other loan and application information.

We deeply regret this incident and apologize for any inconvenience or concern it may cause you. We take our responsibility to safeguard your information very seriously and will not tolerate any actions that compromise the privacy or security of our customers’ information. We have terminated the individual's access to customer information and he is no longer employed by Countrywide. Countrywide will continue to work with law enforcement authorities to pursue further actions as appropriate.

I don't want to hear this kind of pap.  I want an audit of your systems and how they protected or did not protect me from insider attack.

If you are a current Countrywide mortgage holder, we will take necessary precautions to monitor your mortgage account and will notify you if we detect any suspicious or unauthorized activity related to this incident. We will also work with you to resolve unauthorized transactions on your Countrywide mortgage account related to this incident if reported to us in a timely manner.

I find this paragraph especially arrogant.  I'm the one who needs to do things in a timely manner although they didn't take the precautions necessary to protect me. 

As an additional measure of protection, Countrywide has arranged for complimentary credit monitoring services provided by a Countrywide vendor at no cost to you over the next two years. We have engaged, Inc., an Experian® Company, to provide to you at your option, a two-year membership in Triple Advantage Credit Monitoring.  You will not be billed for this service. Triple Advantage includes daily monitoring of your credit reports from the three national credit reporting companies (Experian, Equifax and TransUnion®) and email monitoring alerts of key changes to your credit reports.

Why are they doing this?  Out of the goodness of their hearts?  Or because they've allowed my information to be spewed all over the world through incompetent systems?

To learn more about and enroll in Triple Advantage, log on to and complete the secure online form. You will need to enter the activation code provided below on page two of the online form to complete enrollment. If you do not have Internet access, please, call the number below for assistance with enrollment.   You will have-90 days from the-date of-this letter-to-use the code to activate the credit monitoring product.

Borrower Activation Code: XXXXXXXXX

And now the best part.  I'm going to need to hire a personal assistant to do everything required by Countrywide and still remain employed:

In light of the sensitive nature of the information, we urge you to read the enclosed brochure outlining precautionary measures you may want to take. The brochure will guide you through steps to:

  • Contact the major credit bureaus and place a fraud alert on your credit reports;
  • Review your recent account activity for unauthorized charges or accounts;
  • Be vigilant and carefully review your monthly credit card and other account statements over the next twelve to twenty-four months for any unauthorized charges; anTake action should any unauthorized activity appear on your credit report.

I need more information on why I only need to be vigilant for twelve to twenty-four months, when, thanks to Countrywide, my personal information has spilled out and I have no way to get it back!

We apologize again that this incident has occurred and for any inconvenience or worry it may have caused.  If you have questions, please call our special services hotline at 1-866-451-5895, and a specially trained representative will be ready to assist you.


Sheila Zuckerman
Countrywide Office of the President

O.K.  This is going to be a long process.  It drives home the need for data minimization.  It underlines the need for stronger authentication.  But EVERY case like this should make us deeply question the way our systems are structured, and ask why there are no professional standards that must be met in protecting private information.

When a bridge collapses, people look into the why of it all.

We need to do that with these identity breaches too.   As far as I'm concerned, Countrywide has a lot of explaining to do.  And as a profession we need clear engineering standards and ways of documenting how our systems are protected through “need to know” and the other relevant technologies.

Finally, we all need to start making insider attacks a top priority, since all research points to insiders and our number one threat.


Wide coverage of the Information Card Foundation

There has been a lot of coverage of the newly formed Information Card Foundation (ICF) in the last couple of days, including stories by mainstreet publications like the New York Times.  This article by Richard Thurston from SC Magazine gives you a good idea of how accurately some quite technical concepts were interpreted and conveyed by our colleagues in the press.

Google and Microsoft are among an extensive set of technology vendors aiming to spur the adoption of digital identity cards.

The two internet giants have helped form the Information Card Foundation (ICF), which aims to develop technologies to secure digital identities on the internet and which was launched today.

Digital identity cards are the online equivalent of a physical identity card, such as a driver's license. The idea is that internet users will have a virtual wallet containing an array of digital identity cards, and they can choose what information is stored on each card. The aim is to replace usernames and passwords in an effort to improve security.

Alongside Google and Microsoft, large suppliers such as Novell, Oracle, PayPal and financial information company Equifax, have joined the ICF, as well as 18 smaller suppliers and industry associations.

“Our shared goal is to deliver a ubiquitous, interoperable, privacy-respecting federated identity layer as a means to seamless, secure online transactions over network infrastructure,” said Brett McDowell, executive director of Liberty Alliance, one of the founding members.

The idea of digital identities is far from new. But so far vendors’ efforts have been fragmented and largely not interoperable.

The ICF is proposing a system based on three parties: the user, the identity provider (such as a bank or credit card issuer) and also what it calls a reliant party (which could be a university network, financial website or e-commerce website, for example).

The ICF argues that, because all three parties must be synced in real-time for the transaction to proceed, it should be more secure.

“Rather than logging into websites with usernames and passwords, information cards let people ‘click-in’ using a secure digital identity that carries only the specific information needed to enable a transaction,” said Charles Andres, executive director of the ICF. “Businesses will enjoy lower fraud rates, higher affinity with customers, lower risk and more timely information about their customers and business partners.”

The ICF now wants to expand its membership to include businesses, such as retailers and financial institutions, as well as government organizations.

It also wants to become a working group of Identity Commons, a community-driven organization which promotes the creation of an open identity layer for the internet.

You can find thousands of similar links to the Foundation here and here.  Amazing.

Satisfaction Guaranteed?

Francois Paget, an investigator at McAfee Avert Labs, has posted a detailed report on a site that gives us insight into the emerging international market for identity information.   He writes:

Last Friday morning in France, my investigations lead me to visit a site proposing top-quality data for a higher price than usual. But when we look at this data we understand that as everywhere, you have to pay for quality. The first offer concerned bank logons. As you can see in the following screenshot, pricing depends on available balance, bank organization and country. Additional information such as PIN and Transfer Passphrase are also given when necessary:


For such prices, the seller offers some guaranties. For example, the purchase is covered by replacement, if you are unable – within the 24 hours – to log into the account using the provided details.

The selling site also proposes US, Austria and Spanish credit cards with full information…

It is also possible to purchase skimmers (for ATM machine) and “dump tracks” to create fake credit cards. Here too, cost is in touch with the quality:


Many other offers are available like shop administrative area accesses (back end of an online store where all the customer details are stored – from Name, SSN, DOB, Address, Phone number to CC) or UK or Swiss Passport information:


Read the rest of Francois’ story here.  Beyond that, it's well worth keeping up with the Avert Labs blog, where every post reminds us that the future of the Internet depends on fundamentally increasing its security and privacy.   [Note:  I slightly condensed Francois’ graphics…]