Perilocity

Checks on Checks, or Shipping and Shipping Software

Paul Graham points out that big company checks on purchasing usually have costs, such as purchasing checks increase the costs of purchased items because the vendors have to factor in their costs of passing the checks.

Such things happen constantly to the biggest organizations of all, governments. But checks instituted by governments can cause much worse problems than merely overpaying. Checks instituted by governments can cripple a country's whole economy. Up till about 1400, China was richer and more technologically advanced than Europe. One reason Europe pulled ahead was that the Chinese government restricted long trading voyages. So it was left to the Europeans to explore and eventually to dominate the rest of the world, including China.

— The Other Half of "Artists Ship", by Paul Graham, November 2008

I would say western governments (especially the U.S.) subsidizing petroleum production and not renewable energy is one of the biggest source of current world economic, political, and military problems. Of course, lack of checks can also have adverse effects as we've just seen with the fancy derivatives the shadow banking system sold in a pyramid scheme throughout the world. It's like there should be a balance on checks. Which I suppose is Graham's point: without taking into account the costs of checks (and I would argue also the risks of not having checks), how can you strike such a balance?

He doesn't neglect to apply his hypothesis to SOX:

Confusopoly, or Scott Adams, Prophet of Finance

While sitting in a small room perusing a book from the bottom of the stack, The Dilbert Future, I idly looked again at Scott Adam's prediction #2:

In the future, all barriers to entry will go away and companies will be forced to form what I call "confusopolies".

Confusopoly: A group of companies with similar products who intentionally confuse customers instead of competing on price.

OK, good snark. But look at the list of industries he identified as already being confusopolies:

• Telephone service.
• Insurance.
• Mortgage loans.
• Banking.
• Financial servvces.

Telephone companies of course since then have gone to great lengths to try to nuke net neutrality.

And the other four are the source of the currrent economic meltdown, precisely because they sold products that customers couldn't understand. Worse, they didn't even understand them!

It gets better. What industry does he predict will become a confusopoly next? Electricity! And this was in 1998, before Enron engineered confusing California into an electricity-price budget crisis.

For risk management, perhaps it's worth considering that simply selling something the customer can understand can rank way up there. Certainly for the customer's risk. And given how much the FIRE companies drank their own Kool-Aid, apparently it's good risk management for the company itself. Especially given that the Internet now gives the customer more capability to find out what's going on behind a confusopoly and more ability to vote with their feet.

To actually make a product the customer wants, and then provide good customer service: how old-fashioned! And how less risky and more profitable in the long term.

Crossing the Street in Cyberspace: Michael Kaiser and the National Cyber Security Alliance

If you grew up in a small town, you'd likely cross the street without stopping to look each way. Try that in New York City, and you'll end up in the hospital. Similarly, most of us grew up in meatspace and clicking on any old link in cyberspace often ends up with our bank account in the hospital.

OK, that was my mangled simile, but it illustrates what Michael Kaiser and the National Security Alliance are trying to do: educate the public about what to do and not do in cyberspace without losing their audience with technical details or lengthy pedantic instructions. In his talk at APWG he had all sorts of interesting points, such as address different audiences (K-12, small business, elderly, etc.) differently, and that it's not just unlearning bad habits (including ones that would be good habits in other contexts), it's teaching good habits. ANd changing habits of any kind requires repetition and persistence. As Kaiser said, look at the CDC and its ongoing campaigns of prevention of HIV, domestic violence, etc.

Personally, I think staysafeonline.org could use more graphics and less text, or, more importantly, more storyline. It seems a tad pedantic to me. More poets in prevention! Or more marketing in staying safe. Or something.

But it's a useful site already.

Teachable Moment: APWG/CMU Phishing Education Landing Page program

Phishing? Fail!

When you take down a phishing domain or server, don't just take it off the net: redirect it to this education page so victims of phishing can learn in the act of being suckered by a phisher that they should be more careful what they click on.

As someone in the audience pointed out, whatever you do don't redirect phishing pages back to the actual sites being phished, i.e., if the phisher was pretending to be a bank, don't take down the phisher's redirect and replace it with a redirect to the bank itself. THat just teaches people the wrong thing, to follow a bad link.

Instead, link to the APWG/CMU landing page. Which could use a catchier name (how about Phishing: Fail!), but it's already a really good service.

MySpace Anti-Phishing

Shing Yin Khor of Fox Interactive Media, which owns MySpace, gave an entertaining talk at APWG in which she gave a good case that MySpace has mostly eliminated phishing ads on MySpace and is busily suppressing other phishing.

Throwing money at the issue of phishing actually works.

MySpace's anti-phishing forces include former law enforcement people, including a former federal and state prosecutor, a former L.A. D.A., and a former FBI agent. They have successfully sued spam king Scott "ringtones" Richter and his CPA empire.

MySpace does have an advantage in actually hosting all displays and messages. It's good to be a many-hundred-million shopping mall. She didn't say that; I did. She did say they use MySpace specific measures such as education via Tom's profile. Tom was one of the founders of MySpace. Every new user gets Tom as a friend, so his online persona (pictured) has 240 million friends, so that's a channel that reaches most of their users. She did say:

Education is just as important as technical measures.

What works on MySpace will work on other social network sites.

But Shing's theme of pro-active measures against phishing and spam is one other organizations could take to heart. Don't think you can do nothing: you can.

Of course, if you have fewer than 200 million users, you may want to band together with other organizations, for example by joining APWG. Even MySpace does.

Class Action Coming for Identity Theft?

It wouldn't be a moment too soon:

I painfully predicted a few years back that phishing and related identity theft would result in class action suits. I lost my bet as it didn't happen fast enough, but a significant step has been taken (reported by Lynn) with the publication of a book that apparently blames the banks and the software manufacturers for identity theft.

— Signs of Liability: 'Zero Day Threat' blames IT and Security industry, Ian Grigg, Financial Cryptography, April 14, 2008

The book review iang quotes gets it about online crime not being amateur anymore: it's organized. And it gets it about perhaps a more important point:

Phishing Verified

Or is it really phishing when the victim first broadcasts his bank account details?

BTop Gear presenter Jeremy Clarkson has admitted he was wrong to brand the scandal of lost CDs containing the personal data of millions of Britons a "storm in a teacup" after falling victim to an internet scam.

The outspoken star printed his bank details in a newspaper to try and make the point that his money would be safe and that the spectre of identity theft was a sham.

He also gave instructions on how to find his address on the electoral roll and details about the car he drives.

However, in a rare moment of humility Clarkson has now revealed the stunt backfired and his details were used to set up a £500 direct debit payable from his account to the British Diabetic Association.

The charity is one of many organisations that do not need a signature to set up a direct debit.

— Clarkson stung by fraud stunt, Guardian Unlimited, Monday January 7 2008

He admits he was wrong, but nonetheless tries to pin the blame partly on a privacy law:

"The bank cannot find out who did this because of the Data Protection Act and they cannot stop it from happening again," he said. "I was wrong and I have been punished for my mistake."

At least he doesn't call for revoking that Act; he does call for going after the perpetrators.

-jsq

PS: Seen on BoingBoing.

The Flaming Black Swan of Hinckley

They didn't see it coming, because they were looking the other way:

Speaking of wildfires, my book of the day is Under a Flaming Sky: The Great Hinckley Firestorm of 1894. It is the sharply written story of a how a Minnesota town of 1,200 was devastated by a catastrophic firestorm that came raging out of the nearby woods with tornado-class winds and a 300-foot wall of fire, killing 436 people.

— Book du Jour: Under a Flaming Sky, Paul Kedrosky, Infectuous Greed, October 3, 2007

Wikipedia says it burned 200,000 acres and some sources say 800 people died. Some people who lived jumped into wells or ponds or the river, or caught one of two trains that made it out of town.

So what was it that burned?

APWG in Pittsburgh and Fraud in Japan

The Anti-Phishing Working Group is having one of its periodic member meetings, this time in Pittsburgh. Probably I shouldn't report too much detail, but I'll say that interesting things are going on worldwide that may spread to other countries. For example, in Japan it seems that fake programming sites are more popular than phishing. Also, if I heard correctly, most phishing in the Japanese language originates from phishers in Japan. This would make sense, since it's very hard for foreigners to write well enough to pretend to be Japanese. So that one probably won't spread too widely, but the fake programming scam could.

My favorite is the history attack. World War II ended on 15 August 1945 in Japan, so a timeline of that war can get a lot of hits on a war's end link in August of any year. Who would have known history could be so popular?

Meanwhile, during Carnival in Brazil, nobody reports malware, so there's a dip in measurements.... Then and the rest of the year, sophisticated personalized social engineering attacks seem to be popular in Brazil.

-jsq

Count 'Em All By Hand

I admire Matt Blaze, and I only hope he was being sarcastic in the entire post in which, after pointing out that California just decertified three major voting machine manufacturors due to massive security problems, he wrote:

How to build secure systems out of insecure components is a tough problem in general, but of huge practical importance here, since we can't exactly stop holding elections until the technology is ready.

— The best defense: Ad hominem security engineering. Matt Blaze, Exhaustive Search, 6 August 2007

Well, yes, yes we can.