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Watch out for information fraudsters

Security Pipeline carried an excellent article by Michael Cohn this week on criminal activity that is costing credit card holders millions in fraudulent transactions.

Termed "phishing" the modus operandi involves crooks sending fraudulent e-mail that appears to be from a legitimate organization such as a bank, credit card company, online merchant, or Internet service provider asking the recipient to divulge personal and financial information birthdates, Social Security numbers and PIN codes. Unlucky victims are then subject to identity theft, monetary losses, and credit card fraud.

In the USA, federal and state law enforcement has linked organised crime to phishing attacks that are increasing in both volume and sophistication.

"There's a lot of activity in the former Soviet bloc, the Eastern bloc, Latvia, and Ukraine," says John Curran, supervisory special agent with the Federal Bureau of Investigation's Internet Crime Complaint Center. "It definitely looks like there are organised groups."

The U.S. Secret Service has also noted an increase in organized crime involvement in phishing. At AIT Global's Annual InfoSec Meeting at the United Nations in June, Robert Caltabiano, an official in the New York Field Office of the U.S. Secret Service, pointed to the increasing indications of organised crime in phishing attacks. Although Caltabiano recommended that victims first go to local law enforcement for help, he noted, "with phishing attacks, the information goes global."

There's even an Anti-Phishing Working Group. This industry forum, reported 1,197 unique attacks in May 2004, up from 402 attacks in March.

Making matters worse are hacker websites that sell phishing starter kits. "There's a whole underground economy of trading credit card information back and forth and the tools for doing credit card fraud," an official of the group says.

On the positive side, there have been several successful prosecutions. The Moscow Times reported in May that the U.K.'s National High-Tech Crimes Unit arrested 12 Russian-speaking people who had been recruited by the Russian mafia to participate in a phishing scam. The suspects, who came from Russia, the Baltic republics, and Ukraine, set up bank accounts where money stolen from phishing victims was deposited.

The New York Times recently reported that authorities in Romania had arrested 100 hackers involved with phishing attacks. The Romanian General Directorate for Combating Organised Crime, working with the Secret Service, arrested one hacker, Dan Marius Stefan, in September 2003. Stefan was convicted of stealing nearly $500,000 through phishing e-mails that claimed to be from eBay. He is now serving 30 months in jail.

In the United States, the Federal Trade Commission has worked with the Department of Justice and the FBI on filing complaints and prosecuting several individuals, including Zachary Keith Hill, of Houston, Texas, who pleaded guilty in May and was sentenced to a 46-month prison sentence. Hill had been sending e-mails claiming to be from the AOL Billing Center.

Phishing is clearly another growing danger, demanding increased alertness from casino and player alike.

News courtesy of Infopowa news service. More news here.