Lecture 25: Cybercrime, Problems, workings and solutions to problems

Introduction

 More and more criminals are exploiting the

1. speed,
2. convenience
3. anonymity
 of the Internet to commit a diverse range of criminal activities that know no borders, either
physical or virtual.

Any type of criminal activity involving the use of a computer or other cyber device.

Types/ working

1. Computers used as a weapon: Using a computer to commit real world crime

2. Computers used as the target: Using a computer to attack another computer

cyber attacked industries:

Healthcare (Insurtech)

Manufacturing

Financial Services (FinTech)

Government (RegTech)

Transportation

Types of Cybercrime

 Hacking (credit card)- Supporting money laundering

 Denial of Service Attacks
 Identity theft Registered data hacked or leaked including persons Addresses and account
details.
 Virus Dissemination- software that attaches to other software that destroys the system
of the victim. They disrupt the computer operation and affect the data store by
modifying or deleting it.
 Computer Vandalism: extracting a user's password or other data or erasing the hard
disk. Or other hardware from the Computer
 Cyber Terrorism- Supporting terror funding
 Online Fraud – credit card details asked by fraud party
 Software Piracy- fake applications and websites
 Forgery: Imitations for example digital signatures
 Malicious Code- misuse of coding by servers
 Malware: Software with intend to effect computer with viruses
 Phishing Phishing is the fraudulent attempt to obtain sensitive information such as
usernames, passwords and credit card details by disguising oneself as a trustworthy
entity in an electronic communication.
 Spam Misleading emails
 Spoofing a spoofing attack is a situation in which a person or program successfully
identifies as another by falsifying data, to gain an illegitimate advantage.
  Defamation Defamation is the oral or written communication of a false statement about
another that unjustly harms their reputation and usually constitutes a tort or crime.

Examples of Cybercrime

1. Transferring business finance into personal accounts (Money Laundering)

2. Russian hackers steal $10 million from Citibank and distribute the money to bank
accounts around the world
3. Use of Defence department systems for fake communication. For example, many of us
have received calls saying we are calling from Pak army in Pakistan.
4. Hacked American election
5. illegal drug trafficking as a criminal money-maker
6. A personal identity is stolen once every 3.1 seconds as a result of Cybercrime
7. Nearly half of all cybercrimes are committed against small businesses,
8. smartphones, cars, railways, planes, power grids, security cameras, refrigerators, garage
door openers, etc.

solutions

secured, insured crowdfunding, p2p lending and Block chain.

Apple security accounts for example

Sensor car openers

Voice or thumb sensored locks

Security alarms with security cameras.

Crime service providers

 Growing industry of hackers for hire

 Hacking tools for sale
 Digital currency laundering services
 Hosting services designed for malware
 “Customer service” centers for ransomware
 The Dark Web is home to Ebay – same as clearing houses for a huge array of criminal
services and products
 The WEB

Data

Global cost of cybercrime estimated in excess of $2 Trillion. 68% of breaches result in lost data
within first 24 hours.

Workings of Cybercrime

Business Email Compromise

Foreign suppliers

 Fraudulent request is made for invoice payment to a different account

 Email request will very-closely spoof legitimate request and will be difficult to identify as
fraudulent
 Sometimes also conducted by phone call or fax.

Business Executive

 Email account of executive is either spoofed or hacked

 Wire transfer request is made by the “executive” to another employee
  Fraudulent request may also be made to the company’s financial institution
 Request usually has an urgent nature.

Employee Email

 A business employee has their email hacked

 Employee’s email history and contacts are studied
 Fraudulent requests for payments are made to other businesses with whom the
employee has relationships.

Attorney

 Fraudsters impersonate lawyers or representatives of law firms

 Victims are pressured to act quickly and secretly
 Funds transfers are requested
 Usually happens late in the day

Data Theft

 Business executive email is used

 Victim is usually HR or payroll employee
 Fraudulent request is usually for tax information or other personally identifiable information
(PII)
 First began happening in 2016

Problems of Cybercrime (social Engineering)

1. Pretexting - creates a fabricated scenario posing as a representative of a legitimate business

that needs sensitive information. Creates Trust.
2. Diversion - tricks the victim into delivering goods or data to an unsafe location.
3. Phishing - sends an email to a huge list of potential victims with malicious code to refer to
fake sites.
4. Vishing / Phone Phishing - Phishing using a telephone. Smashing – using SMS.
5. Spear Phishing - Targeted phishing / vishing with research to make phishing attempts more
successful.
6. Water Holing - target an industry, interest group, organization, etc. Website commonly used
by victims is studied and ultimately compromised
7. Baiting - lures the victim into opening a malicious file, usually relying on curiosity or greed.
8. Quid Pro Quo - tricks the victim into doing something in exchange for a service or action.
Tailgating - gains physical entry to a secure area. Follows a legitimate employee.

Preventive Measures as Solutions to Cybercrime

1. Educate and train employees

2. Be wary of any urgent request or pressure to act quickly
3. Develop processes for wire transfers that require multiple types of authorization
4. Ensure all wire transfers correspond to an active purchase order in your system
5. Purchase all domain names that are easily mistaken variants of your main domain name
6. Create email rules that flag external email
7. Sanitize websites and social media of sensitive information
8. Do not allow the same employee to initiate and approve wire transfers
 9. If you are a victim, contact your financial institution and law enforcement immediately.

Ransomware

Ransomware is a type of malware from crypto virology that threatens to publish the victim's data or
perpetually block access to it unless a ransom is paid. For example you have to pay some amount or
provide your personal information before downloading any computer software or mobile app.

 Malware: Software with intend to effect computer with viruses

 Usually not targeted

 Victim data is encrypted and a ransom is demanded to decrypt data
 Ransom is paid via Bitcoin, wire transfers, and Money Pak – all difficult or impossible to trace
 Numerous variants with more appearing regularly
 Paying the ransom usually results in the decrypting of data and 64% of victims pay the
ransom
 Ransoms typically range from 1 or 2 bitcoins to 100 or more bitcoins

Paying victims have included:

− City and county governments

− Police and Sherriff departments

− School districts

− Hospitals

− International state governments

− Businesses and organizations of all sizes

− Home users

Solutions

 Customer is now transitioning to Microsoft Outlook – Being a more secure email provider
 process of checking master supplier bank details has been implemented prior to paying any
invoices in order to mitigate this risk
 The bank refunded the money, the account numbers were corrected and an IT review was
conducted to identify holes in the IT system
 The emails contain formatting and grammatical errors not consistent with their usual style.
They make claims of a suspicious nature. A query of this email directed to either employee
of the group would likely have detected the fraudulent activity.
 Bank responsible, confirmation from the bank.
 Purchase cybercrime insurance;
 Engage a Cyber Security Professional to review the security of your systems;
 Educate staff on cybercrime and encourage them to remain vigilant in regard to the risks
around emails requesting payment or containing links;
 Strict use of only official email addresses by all
 Directors for conducting of entity related business.
  BlockChain as a solution to Money laundering and Cybercrime
 Block chain-powered payments are hyper-secure and private.
 Details of transaction only available to participants of that transaction.
 Changes in transaction only possible through consent of participants.
 Eliminates the need for an intermediary to handle financial
 services like money transfers.

 Back up data

Consideration/ conclusion

• Need a policy/risk plan

• Contact authorities

• Employee counselling

• Termination of employment?

• Implement/monitor control systems

• Education