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UK Banking Law Blames Customers For Insecure OS
Journal written by twitter (104583) and posted by
Zonk
on Sun Apr 06, 2008 01:23 PM
from the laws-with-no-cause dept.
from the laws-with-no-cause dept.
twitter writes "If you use an insecure OS in the UK and someone drains your bank account, the banks say it's your fault. The Register reports: 'The Banking Code produced by the British Bankers' Association (BBA), and followed by most banks, makes it clear that banks will not be responsible for losses on online bank accounts if consumers do not have up to date anti-virus, anti-spyware, and firewall software installed on their machines.'" twitter went on to note that the majority of consumer PCs use an operating system with a history of security issues. Should end users be ultimately responsible for the state of their systems?
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Scare tactics (Score:5, Informative)
But I think there's an ulterior motive here. As a part of Chip-and-PIN, the UK is testing a brilliant two-factor authentication system this year for cards that will cryptographically render browser, PC, and merchant security moot. It's possible this is being used as a "warning shot" to frighten consumers into picking up the tab for the high cost (approximately $70) of the handheld security module.
They have the technology to keep it safe now. I think they're just too cheap to fund it themselves. (And I really wish we'd start seeing that kind of security technology available here in America. I'd switch banks and pay the $70 myself in a heartbeat.)
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Re:Scare tactics (Score:5, Informative)
What they do is move all the encryption to a "trusted platform" -- the device itself. You enter your card and your PIN into the handheld, and it's their own crypto hardware using their own crypto algorithm to generate a one-time-use PIN for you to enter into the merchant's PIN pad or into a web site.
This turns your card into a pure identification token, and turns your PIN into a secure authentication token. Without both tokens, the bank refuses to part with your money. You can enter this into a sleazy internet cafe's browser. It doesn't matter if that transaction's data is stolen or not, because the bank won't authorize your one-time PIN for a second transaction.
What makes these a great solution is not just their security, but that they're backward compatible with current PIN pad technology. The retailers just send your PIN along, they don't care if it's your personal PIN or a generated PIN. The bank takes care of that.
There's an even more secure variant that ABN-AMRO has deployed for web banking transactions. You enter the amount of the transaction into the handheld along with your PIN. That way, only the amount you authorize will be transferred, and the PIN is useless for any other amount.
(I'm basing my guess of $70 on the price of similar hardware offered by RSA with their SecurID scheme, but it's just a guess.)
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Re:Scare tactics (Score:5, Informative)
This has never been the case in the UK, we have never had PIN entry at the retailer until the EMV (chip 'n' pin) cards came along, and they work the same way as you suggest - the pin pad and card reader are trusted devices and the PIN never leaves them. They are encrypted, by the card, along with the amount of the transaction (which is displayed to the user, not entered by them) and various other bits of information. The retailer's network never gets your PIN, only the device and the bank's word that it was correct.
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Re:Scare tactics (Score:5, Informative)
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Re:Scare tactics - technical correction (Score:5, Informative)
Not to say the other method isn't better, but it isn't quite that bad. I used to work in the debit processor industry, essentially our computers were the ones that the PIN was sent along to.
It actually works like this: PIN entry -> Unique encryption in keypad (light sensitive PRAM typically) -> Debit machine processing -> VPN or dial-up direct to processor -> decryption based on id of machine and uniquely assigned encryption keys -> somehow (varying) communicated to bank ->back up the line with approval/denial.
It is supposed to be using hardware that never stores the encryption keys (triple DES mandated) anywhere that is accessible from the machinery that processes the transaction and they're tamper resistant (not quite proof, but difficult) with the encryption key knowledge being split between (at least) two people. The keys are unknown to the people who handle them until the time of entry and only stored in the end machine and in the processing machine (identified by serial number or machine ID.)
It is possible for the systems to be compromised in several ways, but paranoid safeguards are in place to make it difficult. Getting card numbers is no terrific feat, as evidenced by all the news stories about exactly that, but mechanically getting PINs usable for debit transactions is tremendously more difficult. That isn't to say it can't be done, but it does raise the barrier much higher than just sending your PIN along.
On the other side though, the decision on whether to approve or deny a transaction is typically just a matter of an unencrypted 0 or 1 along with the mirror of the transaction. If a transaction is denied, but the machine gets a 1 where it should have received a 0, then the merchant has no immediate indication that the cash or goods weren't paid for. Machines using debug or emulation modes occasionally get into service and approve everyone without even validating the transaction, but as you can imagine that gets pretty prompt attention.
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Re:Scare tactics (Score:5, Informative)
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Re:Scare tactics (Score:5, Informative)
I'm generally very impressed with the ABN's solution to this. It actually seems to solution the problem and is not just another case of security theater.
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Simon
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Re:Scare tactics (Score:5, Informative)
At least in Finland (and I imagine probably the other Nordic countries as well), you can use cash for a decreasing amount of payments. Nearly everyone who demands money of you wants you to pay by bank transfer, and if you don't use your free online banking and decide you want to hand cash to a teller, there's a 3 euro fee for the service. Nearly everyone who wants to pay you money will only deposit it directly into your bank account, there are no more cheques. I'm sure this will spread to other EU countries.
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Re:Scare tactics (Score:5, Informative)
Q) I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
A) The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.
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Re:Scare tactics (Score:5, Interesting)
Interestingly, according to wikipedia [wikipedia.org], the "legal tender" phrase was added because the government couldn't pay its debts with gold or silver, and nobody wanted paper money instead. The phrase was added to compel them to accept the paper money.
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Re:Scare tactics (Score:5, Insightful)
Banks are held accountable for THEIR systems.
Users should be accountable for THEIR systems as well.
Now, if the bank sold, loaned or leased to me a data terminal for accessing THEIR systems - sure, they'd be accountable for it. But since I'm using MY system, that I configured, operate and maintain - how on earth can the BANK be accountable for that?
For years now, geekly types have been crying about the vulnerability in the "popular products". Since that product held an effective monopoly on the market, consumers happily drank the only 'koo-aid' available.
Now that these same individuals that have been enjoying 'oblivious immunity' will have to pony up for the failures in their personally owned tools - they'll demand, and get, improvements.
It's only good for everyone.
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Re:Scare tactics (Score:5, Insightful)
I don't use my bank's internet-based facilities, because they don't support my (more secure) choice of software- bizarre...
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Re:Scare tactics (Score:4, Insightful)
I agree. I disallow any client-side code to run in my browser, and that makes it difficult or impossible to use many financial websites (not because allowing it would be more secure, but because the developers of the website go out of their way to make it that way).
Responsibility needs to go hand-in-hand with the power to make a decision; if a bank requires particular combinations of software, or disallows my preferred security policies, then it's their decision, and should be their responsibility. If the bank merely recommends software, but doesn't seek to subvert my security policy, then yes, faults in my security policy are my own damn fault.
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Re:Scare tactics (Score:4, Insightful)
What is an issue is the wording - nothing in The Register's article suggests that they've included the magic phrase "where necessary". You could be using an SELinux box tightened beyond belief with no need for anti-spyware or antivirus, but if you get ripped off through a website, their first question is going to be "What antivirus are you running?" and if the answer isn't a well known commercial product, then it's your problem and not theirs.
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Re:Scare tactics (Score:4, Informative)
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Re:Scare tactics (Score:5, Insightful)
A coworker got his xbox-live account phished several weeks ago. Although he's having a really hard time getting his account recovered properly, he's fully accepted responsibility for what he did. I showed him an example phishing email I got and how it takes you to chase visa and you look in the url and it's some random IP in russia. He had no idea to pay attention to that, but now he does.
And he 100% accepts responsibility for his actions. And that's how it should be. But there's not enough of that going around right now, too many people wanting to blame their own lack of education on the world. If you don't understand a system to the point that you are not able to use it responsibly, you shouldn't be using it.
That's why we have drivers licenses. I've seen the idea jokingly suggested from time to time that you should require a permit to get on the internet. And it's things like this that make me seriously wonder if they have something there. But then it's someone taking the responsibility away from you and accepting the burden themselves. They can be held accountable for giving you a permit if you don't know what you're doing. So you see, these types don't want to accept the responsibility for making sure they are educated, and they don't want to accept the responsibility for what happens to them as a result.
Can't have it both ways.
You either have to submit to someone else making sure you are competent, or you have to be willing to accept responsibility for the outcome of your incompetence.
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Re:Scare tactics (Score:5, Insightful)
Do you understand the inner workings of a fuel injected turbo with dual over head cams - or do you have a general idea and just use it assuming safety from the manufacturer?
Do you understand the inner workings/procedures and protocols that it takes to fly a commercial airliner from LA to NY - or do you have a general idea and just use the transports assuming those that be aren't putting your life at risk for a mere buck?
Do you understand biology and the inner workings of your OWN BODY - or do you assume and rely on doctors and those in the medical profession to NOT kill you mistakenly for the treatment of a zit?
"You either have to submit to someone else making sure you are competent, or you have to be willing to accept responsibility for the outcome of your incompetence." - Typical arrogant and assinine comment from the godly geeks among us, when your inflated ego can go an entire day with out relying on ANYTHING that ANY manufacturer claims is perfectly safe and secure to use (regardless if it is or isn't - read M$ and ANY software corp) then, AND ONLY THEN would you have a valid argument to make and have something to back it up. Until then, you need to wake the fuck up and stop expecting everyone else in the world know as much about computers and the internet as you do - because you rely on company-X telling you using such-n-such is perfectly safe, just as much as grandma and little Jane down the street relies on M$ and the billions of other software manufacturers telling them everything is safe to use their products - not to mention teller X and sales boy Y doubling as a pretend security expert that just "knows" it is safe (hint, they are told to say that).
Arrogance like this is a big part of the problem - Marketing takes crap like this and runs with it, not to mention the legal department - who cares if it is complicated and way to much to comprehend for 90% of the population, the "experts" that do know what they are talking about blame everyone for not knowing what they know, so we'll do the same, they just don't mention the education and knowledge base behind it - but who cares about that?
EVERYONE SHOULD ALREADY KNOW IT! - and that is the biggest load of arrogant bull shit I've heard in a long time.
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Re:Scare tactics (Score:5, Interesting)
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Re:Scare tactics (Score:4, Funny)
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Re:Scare tactics (Score:5, Interesting)
In any case, do you really want the bank to be responsible for the security of your system? Because, honestly, I REALLY DO NOT want the banks 'staff of professionals' ensuring my security by requiring I install some type of custom 'security' software.
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Re: (Score:3, Insightful)
Was it on the user's pc? Then i guess its their fault technically. If its in the banks system, then the bank is on the hook.
Problem is that people really don't/can't understand the systems they are using as they are far too complex and to expect/demand them to keep them 'safe' is ludicrous. ( even "IT pros" cant always do it with the constant barrage of attacks on what is are fundamentally flawed systems )
However, the same logic goes for a car. Its far to complex for most peopl
Re: (Score:3, Insightful)
Banks are responsible for their own systems, and that is the full-time focus of those professionals. It is irrational, in my opinion, to expect them to take full culpability for the entire universe of client systems as well. Unless you're willing to accept a dictum that you must you BankOS running on BankHardware over the BankNet if you ever plan on accessing your money.
Damned if you do... (Score:5, Funny)
bankers: "You better use a secure OS, or you'll be liable for any fraudulent transactions with your account."
customers: "Okay. What if we use Firefox on Linux?"
bankers: "That'll work."
customers: "Hey, we can't access your site using Firefox!"
bankers: [British equivalent of "hah! Sucks to be you!"]
Re:Damned if you do... (Score:4, Insightful)
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this is scary (Score:5, Insightful)
Re: (Score:3, Insightful)
Just in case anyone was taking this serviously, this scenario just aint gonna happen.
To login to my bank account online, I need the online account's ID, my PIN, and my secret word. In addition, I also now need my physical debit card, a card reader, and to enter my PIN in the reader and get back a code to enter for login. Not much chance of someone random
Humourous call (Score:5, Funny)
bank rep asks: whats your operating system:
client says: mac osx
rep says: im sorry sir that means your liable for the losses
client asks: why
rep says: you dont run norton antivirus, only norton antivirus protected computers are safe. Thank you for banking with us, can i help you with anything else?
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Banks hate responsibility (Score:5, Interesting)
If there is a lawyer in the house can they confirm this?
Not sure what the state of the laws are elsewhere, but knowing what a bunch of whining snivelers the banking industry is it's probably the same. The bank is always right and the depositors and the taxpayer pick up the bill.
Re:Banks hate responsibility (Score:5, Informative)
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Re:Banks hate responsibility (Score:4, Funny)
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Same here in Poland (Score:3, Insightful)
ummm ... it's not the consumers property (Score:5, Interesting)
The Microsoft Windows OS is not the property of the consumer using it. It is the property of Microsoft used under a license from Microsoft. If the usage of the OS complies with the license then surely any inadvertent behavior on the part of the OS is the responsibility of the owner (Microsoft) and not the license holder (the end user).
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Re:ummm ... it's not the consumers property (Score:4, Funny)
"3rd party software?" you ask. Aren't you cute! Well yes it would probably exist but it would all have to be Microsoft Certified and probably just about everything would move to a yearly subscription model.
I know some will say "well great! That would force people to choose Linux". Maybe. But more likely people would go along with MS and this new "locked down" model. After all, to Joe Sixpack, the computer is essentially a Black Box and he isn't likely to say "yeah, screw MS, I'm taking ALL the risk on myself and run Linux."
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My two cents (Score:4, Interesting)
2. Bank customers do have some responsibility in security. Analogy: A homeowner has no locks, leaves door unlocked all day long, then tries getting his or her insurance company to pay out when he or she is ripped off.
3. AV, anti-spyware, and firewall. All three must be done? I think most people are familiar with the AV and firewalls, but how many know about anti-spyware software? (I believe Lavasoft's AdAware is one program.) What they should do is say that the person must make a reasonable attempt at securing their computer. (This could include having a separate computer used solely for banking, and nothing else.)
4. A thought just crossed my mind. Will they deny a claim if someone just happens to have an unsecured computer, even if the computer never was used for banking?
Bullcrap. Don't need that stuff. (Score:5, Insightful)
Why should I have a firewall? I have a NAT router (hardware firewall).
Why should I have antispyware? I know what I'm downloading.
Why should I have antivirus?
- I don't download cracks. When I DO need to use a crack I upload it to virustotal and then run it in a virtual machine.
- I run IE7 and Firefox. Although neither are perfectly secure I don't make it a habit to go to Russian warez sites.
Dear god, SOMEONE explain to me why any reasonable user should need this resource-hogging crap?
Re:Bullcrap. Don't need that stuff. (Score:5, Insightful)
Yes, this does happen.
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This is bull. (Score:3, Insightful)
People can be be so negligent that they are practically asking for their wallet to be stolen... in which case they should share some of the responsibility for the theft. But the criminal is still guilty of a crime.
Banks can also be negligent, by not keeping tabs on account activity, or not taking several other measures that can reduce theft and fraud. If they do not do those things, then they should share some responsibility, too.
I see nothing new here, unless the banks are trying to weasel out of their share.
Re:This is bull. (Score:5, Insightful)
next you will be suggesting that the US gvernment should arrest the people doing the phishing, or the companies selling stuff through spam.
This will never happen - they are far to busy figthing the war on drugs and the war on terror to actually olve real life problems.
Spam could be stopped overnight if the US owned credit card companies (ie all credit card companies) were threatened with the same sanctions for processing payments for spam-promoted products that thwere threatened for internet gambling.
The "follow the money" approach ahs been proven to work, and lack of applying it is wholely due to lack of interest by the UK and US governments.
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But... (Score:4, Informative)
Soitenly! Nyuk Nyuk Nyuk (Score:5, Insightful)
I (The Bank Customer) am 100% responsible for the security of my own systems that I use to access the banking website. How could I POSSIBLY expect the bank to be liable for rootkits, malware, spyware, etc. I can't. That's just not reasonable.
The only thing I can think of that might go either way would be DNS type hacks since that would depend on how it was done and just exactly what point in the communication it was affecting.
Now with that being said.........
It would be the BANKS'S RESPONSIBILITY to TELL the consumer THE BAD NEWS. I can't wait. That's a "shitstorm" waiting to happen.
So basically, the vast majority of PC's are hopelessly insecure. We could talk forever about Microsoft this and Microsoft that, and "what about Safari?", blah blah blah blah. The situation is still the same. The Bank Customer's computer is just not secure enough in most cases and it could only be a matter of time before you are the "lucky" one and get nailed. Kind of like a lottery, except you get bent over.
In the end the only thing that will happen is that people will stop using online banking. I know plenty of people now that outright refuse to use it for the perceived security risks NOW. If the bank's outright say that they will not be responsible for the security on your computer, that will only make the situation worse (for them).
I'm pretty good at securing my systems, but even I know it would only take one determined person to get me. If the bank will not at least insure my losses, I can't take the risk of online banking. That simple.
If this really does go down, that will be a pretty big statement about PC security in general. Regardless of who is responsible, if a bank says it will no longer trust the end user's security that is a bad omen for the rest of e-commerce. What about the credit card companies? How will they react to the bank's position?
How do you define secure? (Score:3, Insightful)
I dual boot Ubuntu and Windows. If I type:
sudo apt-get install lokkit (as an example, not an accusation) how do I know I'm not getting a free keysniffer as an added bonus?
I run windows with a firewall, have a firewalled router with minimal ports forwarded, use ad-aware/the windows spyware program/spybot search and destroy as well as AVG. How do I know that none of these pieces of software are, in themselves, spyware/keylogging software? How do I know that my browser hasn't been attacked by some 0-day hack embedded in an ad banner despite rigorous/consistent upgrading of both of my OSes?
Are people really diligent to that point that every time they're about to do their banking, they close all active programs, update and run their suites of virus scanners and anti-spyware software, and *then* do their banking once the all-clear is given by all programs?
Honestly, I just see it as a game of probabilities. *Most likely* I don't have a key logger installed on my system, and *most likely* my banking experience is going to be a sane one, but if the shit ever hits the fan, I'm willing to bet that there are people hired to specifically poke holes in my system and say "Linux is an unapproved OS. We can't cover your banking losses."
I look forward to a better solution.
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This is crap (Score:5, Informative)
My old bank [barclays.com] closed my online banking account without warning, and without bothering to tell me they had. I called them and they said it was because "I had a virus". This, despite the fact that I run a secure operating system [apple.com] (with no known viruses) and have an up-to-date virus scanner [sophos.com]. Couldn't they just suspend my account until I "fixed" the problem? No, I had to open a whole new one.
I did. At another bank [firstdirect.com].
Why should on-line banking be any different... (Score:4, Insightful)
Don't overlook the obvious (Score:4, Insightful)
So just exactly who decided to put customer information / account access on the internet where security problems are widespread and well known? Those so-called professionals at the banks must have known that this would lead to problems - and did it anyway.
Pointing at insecure computers, spyware, malware, etc as being the problem is ingenious. This is simply an attempt by the bank to move some of its expenses onto its customers.
Remember - none of these internet security / fraud problems would exist if the bank hadn't put the customer accounts online. They knew this was likely to happen and now this bad idea is starting to affect their bottom line. Rather than take responsibility for their mistake, they're abusing the legal system to move the losses onto their customers.
Gotta love those banking corporations...
Same thing in New Zealand, but... (Score:4, Informative)
http://www.consumer.org.nz/newsitem.asp?docid=5114&category=News&topic=Internet%20banking%20rule%20back-track [consumer.org.nz]
only if it's your fault (Score:4, Insightful)
In other words, if your authentication info gets stolen by a virus that's in the wild, and would have been blocked by up-to-date antivirus software, you're responsible for what happens as a result.
This does not appear to be intended to make the customer's software a scapegoat, just to hold people responsible for failure to take reasonable steps to protect their accounts. It is still very much in the bank's interest to improve account security measures, as most losses will not be clearly attributable to a cause that would allow this provision to be invoked.
Re:Oh no you didn't! (Score:5, Insightful)
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Re:Oh no you didn't! (Score:4, Insightful)
But it is still a bad idea. While I am working, I want to do some banking stuff several times a day. If every time I need to restart my notebook it would suck. I might start using a VMware instance but not every bank customer is able to.
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