Cybercrime Poses Challenges for Government, Industry Says Report

Over 150 million U.S. citizens are connected to the Internet. According to the FBI, the number of people with access to the Internet increased 182 percent between 2000 and 2005. In 2006, total nontravel-related spending on the Internet was estimated to be $102 billion by a private sector entity, a 24 percent increase over 2005. While the benefits of interconnectivity have been enormous, it has provided new horizons and techniques for crime.

According to a report submitted to Congress last month by David Powner,  Director, Information Technology Management Issues and Keith Rhodes, Director, Center for Technology and Engineering, cybercrime is a threat to U.S. national economic and security interests. The report estimates the direct economic impact from cybercrime to be in the billions of dollars annually. The annual loss due to computer crime was estimated to be $67.2 billion for U.S. organizations. The estimated losses associated with particular crimes include $49.3 billion in 2006 for identity theft and $1 billion annually due to phishing. These projected losses are based on direct and indirect costs that may include actual money stolen, estimated cost of intellectual property stolen, and recovery cost of repairing or replacing damaged networks and equipment.

In addition, the report cites concern about threats that nation-states and terrorists pose to the national security through attacks on computer-reliant critical infrastructures and theft of sensitive information. For example, according to the U.S.-China Economic and Security Review Commission report, Chinese military strategists write openly about exploiting the vulnerabilities created by the U.S. military’s reliance on advanced technologies and the extensive infrastructure used to conduct operations. Cited in the report is FBI testimony to the effect that terrorist organizations have used cybercrime to raise money to fund their activities. Despite the reported loss of money and information and known threats from adversaries, there remains a lack of understanding about the precise magnitude of cybercrime and its impact because cybercrime is not always detected or reported.

Techniques used to commit cybercrimes:

Spamming – Sending unsolicited commercial e-mail advertising for products, services, and Web sites. Spam can also be used as a delivery mechanism for malware and other cyber threats.

Phishing – A high-tech scam that frequently uses spam or pop-up messagesa to deceive people into disclosing their credit card numbers, bank account information, Social Security numbers, passwords, or other sensitive information. Internet scammers use e-mail bait to “phish” for passwords and financial data from the sea of Internet users.

Spoofing – Creating a fraudulent Web site to mimic an actual, well-known Web site run by another party. E-mail spoofing occurs when the sender address and other parts of an e-mail header are altered to appear as though the e-mail originated from a different source. Spoofing hides the origin of an e-mail message.

Pharming – A method used by phishers to deceive users into believing that they are communicating with a legitimate Web site. Pharming uses a variety of technical methods to redirect a user to a fraudulent or spoofed Web site when the user types in a legitimate Web address. For example, one pharming technique is to redirect users —without their knowledge—to a different Web site from the one they intended to access. Also, software vulnerabilities may be exploited or malware employed to redirect the user to a fraudulent Web site when the user types in a legitimate address.

Denial-of-service attack – An attack in which one user takes up so much of a shared resource that none of the resource is left for other users. Denial-of-service attacks compromise the availability of the resource.

Distributed denial-of-service – A variant of the denial-of-service attack that uses a coordinated attack from a distributed system of computers rather than from a single source. It often makes use of worms to spread to multiple computers that can then attack the target.

Viruses – A program that “infects” computer files, usually executable programs, by inserting a copy of itself into the file. These copies are usually executed when the infected file is loaded into memory, allowing the virus to infect other files. A virus requires human involvement (usually unwitting) to propagate.

Trojan horse – A computer program that conceals harmful code. It usually masquerades as a useful program that a user would wish to execute.

Worm – An independent computer program that reproduces by copying itself from one system to another across a network. Unlike computer viruses, worms do not require human involvement to propagate.

Malware – Malicious software designed to carry out annoying or harmful actions. Malware often masquerades as useful programs or is embedded into useful programs so that users are induced into activating them. Malware can include viruses, worms, and spyware.

Spyware – Malware installed without the user’s knowledge to surreptitiously track and/or transmit data to an unauthorized third party.

Botnet – A network of remotely controlled systems used to coordinate attacks and distribute malware, spam, and phishing scams. Bots (short for “robots”) are programs that are covertly installed on a targeted system allowing an unauthorized user to remotely control the compromised computer for a variety of malicious purposes.

The report, “CYBERCRIME: Public and Private Entities Face Challenges in Addressing Cyber Threats”, is a must read for anyone involved with computer security.