Archive for February, 2014

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Cyber criminals are expected to have a banner year in 2014 by continuing to exploit vulnerabilities in computer devices—and the people who use them.

Securing these devices will continue to be a challenge for industry as well as consumers. Business leaders must focus on assessments to evaluate and identify possible exposures from weak processes or policies that gives ever-sophisticated criminals an advantage. At the same time, consumers must educate themselves and to prevent behaviors that work in favor of scammers.

Among the top cyber scams expected this year:

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While there is no shortage of scams, some deserve special recognition for being especially sneaky.

This year—just in time for March 2 to 8—we’d like to spotlight scams that really stood out for the heights of trickery that identity thieves scale to con their victims.

“We reviewed more than a dozen popular scams—all deserving contenders for their deceitfulness—but these four scams truly show how low fraudsters are willing to go to steal consumers’ money and identities,” said Victor Searcy, director of fraud operations at IDentity Theft 911.

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FTC Sentinel

For the 14th consecutive year, identity theft is the nation’s biggest headache for consumers, topping the annual rankings of filed complaints to the Federal Trade Commission.

Of more than two million reports filed with the federal watchdog, 290,056 were related to identity theft. That’s about 14 percent, but remember: Many never report identity theft or other scams and crimes.

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Hospitals may be putting themselves at risk for legal and compliance violations with their lax data security policies, according to a survey of health IT security professionals. The survey conducted by Healthcare Information and Management Systems Society's HIMSS Analytics shows hospitals may be unprepared for incidents involving confidential data loss since they may not have policies regarding protecting and archiving data. 

"The amount of data flowing through our healthcare system today has rendered the old ways of managing it obsolete," said Michael Leonard, director of product management for healthcare IT services a Iron Mountain, which commissioned the survey. "If you look at this survey, you'll conclude that most hospitals continue to treat all data the same and don't sufficiently tier it based on its importance and access requirements."

While the majority of hospitals have a data archiving strategy to stay compliant, they may not be optimizing this data. Most hospitals store their information onsite to access it when they need to, with 75 percent of respondents saying their data is "active." However, less than 30 percent of data contained in onsite facilities is viewed after 18 months, according to the survey.

Data Breach Risk Increased Due to Lack of Security Policies
With hospitals having access to a large amount of data onsite, there is potential for data breaches or confidential data loss in case of disasters like fires or floods or other incidents like theft.

Despite the danger these unexpected incidents may pose to protected health record data, 31 percent of respondents indicated they did not have a disaster recovery and business continuity plan. This number is even higher for hospitals that lacked a documented data retention policy. The survey showed 42 percent of respondents did not have a policy that helped them know whether they need to maintain backup and archival data and when this information should be destroyed.

Not knowing what exactly to do with data to properly protect it could increase the risk of data breaches. A survey by healthcare IT security company Redspin showed 804 breaches exposed more than 29 million patient health records since the enforcement of the HITECH Act, . The provisions of the HITECH Act, or Health Information Technology for Economic and Clinical Health Act, aim to enhance health IT security. While these rules are in place, theft of electronic devices or other digital media that stored protected health information accounted for more than 80 percent of health care security breaches, which is cause for concern for hospitals and patients.

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The storm of consumer-focused data breaches started off as intermittent downpours — Choicepoint, TJ Maxx, SONY, LinkedIn, Twitter, Adobe Systems — and is now a torrent: Target, Neiman Marcus, Kickstarter, White Lodging, the Sands Casino, and now everyone who’s attended or worked at the University of Maryland since 1998. In each case, hackers weren’t after the company’s intellectual property or trade secrets: they were after your information, because it’s the key to your money.

In fact, though it’s been widely reported that the Target breach cost $240 million so far, that amount doesn’t take into account the fraudulent charges individuals had to fight and is itself split among the many financial institutions whose customers were affected by the breach. Meanwhile, Target said in January that it expected to lose only 2-6% of sales over last year, and only in the first quarter.

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apple malware

Users of Apple computers and iPhones may be shaken to the core at news of a major security flaw that could allow cyber spies and hackers to grab emails, financial information and other data from their devices.

Here’s what you need to know:

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A string of cyberattacks on retailers this year immediately following the Target data breach in 2013 has prompted the nation's leaders to act to protect the personal information of consumers. After major data breaches, Attorney General Eric Holder has pushed for a federal data breach notification law, . While states have passed bills that require companies alert consumers, there has yet to be a uniform federal law that establishes rules regarding data breach notifications by retailers. However, massive data breaches that impacted millions of people across the U.S., such as the Target breach, has motivated Holder to change this. 

Unlike the banking and financial services sector or the health care industry, the retail industry does not have a standard that applies across the board for notifying customers of data breaches. Consumers who are unaware they are victims of data breaches, which may have exposed their personal or financial information, could be left them vulnerable to identity theft and other malicious cyberactivity. 

"This would empower the American people to protect themselves if they are at risk of identity theft," Holder said in a statement about the national notification standard. "It would enable law enforcement to better investigate these crimes – and hold compromised entities accountable when they fail to keep sensitive information safe."

Legal and financial implications of data breach rule
Sen. Patrick Leahy, D-Vermont, previously introduced a bill that is similar to the measures Holder is proposing, . The National Retail Federation, which represents merchants, department stores and other retailers, is in support of a notification standard for the retail industry. Despite support for bills like Leahy's picking up, some state attorneys are concerned that the federal data breach notification standards could impede on their ability to investigate cybercriminals. Holder argues that the proposed rule could improve the U.S. Department of Justice's chance of catching criminals.

"This legislation would strengthen the Justice Department's ability to combat crime and ensure individual privacy – while bringing cybercriminals to justice," Holder said, according to CNN.

The federal standard for retailers may also be opposed by other companies. While corporations are worried about the impact public awareness of data breaches and their cybersecurity flaws may have on their reputation, the financial implications of cyberattacks could change their mind. After the Target data breach that exposed the personal and/or financial information of 110 million customers, the retailer was sued by both consumers and banks, Fort Worth, Texas . Not only have consumers had their compromised bank cards used for fraudulent purchases, the banks themselves have potentially lost millions of dollars in reissuing cards.

Eduard Goodman is chief privacy officer at IDentity Theft 911.

The health care industry is one of the most targeted sectors of the U.S. economy as hospitals, insurance providers and other organizations contain valuable personal and financial information. With access to the protected health information of patients, thieves could commit medical identity theft, endangering the lives of their victims. However, these health care systems and devices are repeatedly being infiltrated, which include their computers and software, . Some organizations that have been compromised in the past are still vulnerable to inadvertently exposing sensitive information, .

"The sheer volume of IPs detected in this targeted sample can be extrapolated to assume that there are, in fact, millions of compromised health care organizations, applications, devices and systems sending malicious packets from around the globe," the report said.

The SANS-Norse Healthcare Cyberthreat Report revealed 72 percent of health care providers had malicious IP traffic coming from systems that may have had security breaches. While the vast majority of malicious traffic from the health care industry came from providers, business associates in the health care field exhibited almost 10 percent of traffic. Organizations that were hit by data breaches noted that they were not able to determine the systems that were compromised or had malicious IP traffic coming from them.

Compliance a Major Issue for Health Care Organizations
Both large and small health care providers reportedly had confidential data breaches, which indicates cybercriminals do not discriminate against potential victims in their attack campaigns based on their size.

"Personal health care information (PHI) and organization intellectual property, as well as medical billing and payment organizations, are all increasingly at risk of data theft and fraud because of these attacks and breaches," the report said. "Poorly protected medical endpoints, including personal health devices, become gateways, exposing consumers' personal computers and information to prowling cybercriminals."

Compliance with federal privacy laws, including the Health Insurance Portability and Accountability Act, continues to be an ongoing problem in protecting patient information. Besides fines from the U.S. Department of Health & Human Services, health care providers should be concerned about maintaining the security of connected medical endpoints, including software and video systems.

The report found 7 percent of malicious traffic originated from radiology imaging software while 7 percent came from video conferencing software. Health systems should also make their security systems and other Internet connected monitoring systems are not transmitting malicious traffic as the report indicated 16 percent of malicious traffic actually came from firewalls.

As the Internal Revenue Service is inundated with millions of tax return files, it may be hard for the agency to keep track of potential cases of identity theft. This problem is continuing to affect consumer perceptions of the agency so much that National Taxpayer Advocate Nina Olson called the IRS "an institution in crisis," . A report by the Treasury Inspector General for Tax Administration (TIGTA) urged the IRS to correct its security problems, .

Tax Preparers Lack Regulation
One of these issues is a lack of regulation regarding tax preparers, which could result in these seemingly trusted employees taking customer data to file fraudulent tax returns.

"Right now anybody can say they are a preparer," IRS Commissioner John Koskinen said in an interview, according to The Boston Globe. "There are reputable companies who provide training to their people but there are a lot of people hanging out a shingle and you can do it without any qualifications at all."

Those who wish to become a tax preparer need to receive an identification number from the IRS as well as pay an application fee of $64.25. However, this simple process may put taxpayers at risk for fraud as these preparers could file inappropriate refunds. Out of the $20 billion of fraudulent refunds issued in 2013, about $12 billion were associated with identity theft.

Closing Security Loopholes
Treasury Inspector General J. Russell George said in a press release that loopholes occur from the inside and out, which can allow criminals to potentially gain unauthorized access to sensitive information if systems do not have the right security measures.

Thieves that perpetuate tax fraud by stealing others' sensitive information are a major problem for the agency, but the IRS may not have the resources necessary to stop identity theft after its budget was cut by more than $1 billion over the last four years, according to The Boston Globe. At the same time, however, collections by the IRS have scaled down by $8 billion. The IRS will have to continue to focus its efforts on curbing identity theft. For fiscal 2014, the IRS has a budget that is half a billion less than the previous year with only $11.3 billion, .

"We understand it is a disaster for an individual taxpayer to get caught up with this,'' Koskinen said, according to Forbes. "If we can't stop the improper refund before it goes out the door, then your tax file is polluted with all this."

Walter Boyd is senior privacy advisor at IDT911 Consulting.

Small Business

If some in the small business community thought to themselves, “better them than us,” after hearing that hackers had breached mega chains Target, Neiman Marcus and (possibly) Michaels, their bliss was short-lived. Reports surfaced last week that the cyber-intruders accessed Targets’ systems by first hacking one of their (comparatively) small regional contractors, Fazio Mechanical Services.

Fazio, though, is in good company: a list of the 91 breaches reported in the first 43 days of 2014 compiled by the Identity Theft Resource Center shows not just trusted brands – Home Depot, Walgreens, TD Bank – but a variety of small medical offices and other small businesses whose owners perhaps never thought they’d be targets, too.

That is the crux of the problem facing America’s small businesses and consumers: they may not think they’ll be targets of hackers looking for big scores… but all of them probably will be. It’s just too easy and too lucrative for hackers to gather and utilize people’s personal information for anyone to be safe – including small enterprises with databases that seem at first blush to be of limited utility.

Reality check: hackers will always go after the weakest link. If they determine that the big guys have toughened up, they’re just going to go after easier targets, like small businesses.

So what is a small business owner to do? Instead of throwing up your hands and assuming you can’t afford the technology that big companies use, make the 3 Ms your mantra: Minimize, Monitor and Manage. Make yourself a harder target and know what to do when you become one anyway.

Minimize Your Risk of Exposure

The most important step you can take is to be proactive about your own security, rather than waiting until it’s breached. Some specific steps include:

  • Determine the right security technology and processes for your business, regardless of its size or complexity.
  • Train your employees about security – which includes not falling for spear-phishing emails, not checking personal email or social media on company systems, and not leaving unsecure devices or files unattended.
  • Limit access to important systems and databases to only those people who need it, assign each employee a discrete password and never allow them to share passwords for systems – social media or administrative.
  • Use two-factor authentication on everything you can, and require that your employees do so as well.
  • Put your financial systems, like payroll and banking access, on a separate computer than the one you use for other functions.
  • If you and your employees bring your own devices for work – like cellphones, tablets and computers – establish security protocols for those devices connected to your system and procedures for protecting them.
  • Make sure you have the right physical security for your business.
  • Require complete destruction of any documents or computers you no longer need.
  • And, finally, have frequent outside security reviews to ensure that you are as safe as you think you are.

Monitor Your Security

Don’t rely on a system you set up last year to work next year. On an ongoing basis, make sure that you:

  • Use a reputable firm to do periodic penetration testing of your network to ensure that no unauthorized user can gain access – and fix the problem immediately if someone can.
  • Set up automatic alerts for unusual activity on your networks, so that any such activity results in an email or text message to someone empowered and able to fix any such problem.
  • Designate a compliance officer who constantly checks that your employees adhere to your security policies and procedures.
  • Install all security updates for software and operating systems in a timely fashion on all devices, even those brought in by your employees.
  • Scrutinize your vendors as you do your own employees: vet them and require them to engage in the same testing as you.

Manage the Damage

Make no mistake, everyone will probably experience some sort of breach in the coming years, if they haven’t already, so don’t rely on best practices to prevent future problems. Create a plan before you have an issue in order to make sure you can deal with it. Some ways to develop such a plan include:

  • Contact your insurance agent or your financial institution to see if they offer cyber liability coverage or a damage control program. You may be pleasantly surprised to learn that you are already protected. If not, find out what you need to do and do it.
  • Determine whether that plan covers all the costs of a data breach – like the expense of notifying customers or employees whose data was exposed – and whether the plan will help you and/or your customers navigate the aftermath.
  • Make sure you understand what, if any, time-sensitive reporting requirements are mandated after a breach in order to maintain your coverage.
  • Decide how you will deal with any post-breach media: will you designate someone internally to be your company’s public face, or will you hire a company to do it for you (and which company will you want to hire)?
  • Have a plan in place for how to deal with post-breach phone calls from affected employees and/or customers.
  • Decide what you will do for those individuals affected by your breach. Though it’s now standard to offer credit monitoring, that often isn’t enough for many people: you may need to contract with a company or person to guide victims of your breach through the reporting and resolution process, or do the work for them.

The dangers you face from a data breach often go far beyond penalties, fines, regulatory interactions and litigation. Depending upon the public’s perception of the urgency, empathy and transparency you demonstrate, you could face a devastating loss of trust by business partners, clients and consumers alike.

To even begin to prevent that kind of damage, start by being as protective of the customer and employee data you gather and store as you are with your own trade secrets or intellectual property.

Adam Levin is chairman and co-founder of IDentity Theft 911.

This article originally appeared on .