Ethics in Information Technology, Second Edition

Chapter 3 Computer and Internet Crime

Objectives
What key trade-offs and ethical issues are associated with the safeguarding of data and information systems?

Why has there been a dramatic increase in the number of computer-related security incidents in recent years?
What are the most common types of computer security attacks?
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Objectives (continued)
What are some characteristics of common computer criminals, including their objectives, available resources, willingness to accept risk, and frequency of attack? What are the key elements of a multilayer process for managing security vulnerabilities, based on the concept of reasonable assurance? What actions must be taken in response to a security incident?
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IT Security Incidents: A Worsening Problem

Security of information technology is of utmost importance
Protect confidential data Safeguard private customer and employee data Protect against malicious acts of theft or disruption Must be balanced against other business needs and issues

Number of IT-related security incidents is increasing around the world

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IT Security Incidents: A Worsening Problem (continued)

Computer Emergency Response Team Coordination Center (CERT/CC)
Established in 1988 at the Software Engineering Institute (SEI) Charged with Coordinating communication among experts during computer security emergencies Helping to prevent future incidents

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Increasing Complexity Increases Vulnerability

Computing environment is enormously complex
Continues to increase in complexity Number of possible entry points to a network expands continuously

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Higher Computer User Expectations

Computer help desks
Under intense pressure to provide fast responses to users questions Sometimes forget to Verify users identities Check whether users are authorized to perform the requested action

Computer users share login IDs and passwords

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Expanding and Changing Systems Introduce New Risks

Network era
Personal computers connect to networks with millions of other computers All capable of sharing information

Information technology
Ubiquitous Necessary tool for organizations to achieve goals Increasingly difficult to keep up with the pace of technological change

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Increased Reliance on Commercial Software with Known Vulnerabilities

Exploit
Attack on information system Takes advantage of a particular system vulnerability Due to poor system design or implementation

Patch
Fix to eliminate the problem Users are responsible for obtaining and installing patches Delays in installing patches expose users to security breaches
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Increased Reliance on Commercial Software with Known Vulnerabilities (continued)

Zero-day attack
Takes place before a vulnerability is discovered or fixed

U.S. companies rely on commercial software with known vulnerabilities

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Number of Vulnerabilities Reported to CERT/CC

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Types of Attacks
Most frequent attack is on a networked computer from an outside source Types of attacks
Virus Worm Trojan horse Denial of service

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Viruses
Pieces of programming code Usually disguised as something else Cause unexpected and usually undesirable events Often attached to files Deliver a payload

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Viruses (continued)
Does not spread itself from computer to computer
Must be passed on to other users through Infected e-mail document attachments Programs on diskettes Shared files

Macro viruses
Most common and easily created viruses Created in an application macro language Infect documents and templates
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Worms
Harmful programs
Reside in active memory of a computer

Duplicate themselves
Can propagate without human intervention

Negative impact of virus or worm attack

Lost data and programs Lost productivity Effort for IT workers

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Cost Impact of Worms

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Trojan Horses
Program that a hacker secretly installs Users are tricked into installing it Logic bomb
Executes under specific conditions

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Denial-of-Service (DoS) Attacks

Malicious hacker takes over computers on the Internet and causes them to flood a target site with demands for data and other small tasks
The computers that are taken over are called zombies

Does not involve a break-in at the target computer

Target machine is busy responding to a stream of automated requests Legitimate users cannot get in

Spoofing generates a false return address on packets

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Denial-of-Service (DoS) Attacks (continued)

Ingress filtering - When Internet service providers (ISPs) prevent incoming packets with false IP addresses from being passed on Egress filtering - Ensuring spoofed packets dont leave a network

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Perpetrators
Motives are the same as other criminals Different objectives and access to varying resources Different levels of risk to accomplish an objective

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Classifying Perpetrators of Computer Crime

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Hackers and Crackers

Hackers
Test limitations of systems out of intellectual curiosity

Crackers
Cracking is a form of hacking Clearly criminal activity

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Malicious Insiders
Top security concern for companies Estimated 85 percent of all fraud is committed by employees Usually due to weaknesses in internal control procedures Collusion is cooperation between an employee and an outsider Insiders are not necessarily employees
Can also be consultants and contractors

Extremely difficult to detect or stop

Authorized to access the very systems they abuse
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Industrial Spies
Illegally obtain trade secrets from competitors Trade secrets are protected by the Economic Espionage Act of 1996 Competitive intelligence
Uses legal techniques Gathers information available to the public

Industrial espionage
Uses illegal means Obtains information not available to the public
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Cybercriminals
Hack into corporate computers and steal Engage in all forms of computer fraud Chargebacks are disputed transactions Loss of customer trust has more impact than fraud To reduce the potential for online credit card fraud sites:
Use encryption technology Verify the address submitted online against the issuing bank Request a card verification value (CVV) Use transaction-risk scoring software
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Cybercriminals (continued)
Smart cards
Contain a memory chip Are updated with encrypted data every time the card is used Used widely in Europe Not widely used in the U.S.

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Legal Overview: The Check Clearing for the 21st Century Act
Requires that banks accept paper documents
In lieu of original paper checks Speeds clearing of checks

New opportunities for check fraud

Bankers dont fully realize the extent of possible increased fraud

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Cyberterrorists
Intimidate or coerce governments to advance political or social objectives Launch computer-based attacks Seek to cause harm
Rather than gather information

Many experts believe terrorist groups pose only a limited threat to information systems

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Reducing Vulnerabilities
Security
Combination of technology, policy, and people Requires a wide range of activities to be effective

Assess threats to an organizations computers and network Identify actions that address the most serious vulnerabilities Educate users Monitor to detect a possible intrusion Create a clear reaction plan
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Risk Assessment
Organizations review of:
Potential threats to computers and network Probability of threats occurring

Identify investments that can best protect an organization from the most likely and serious threats Reasonable assurance Improve security in areas with:
Highest estimated cost Poorest level of protection
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Risk Assessment for a Hypothetical Company

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Establishing a Security Policy

A security policy defines
Organizations security requirements Controls and sanctions needed to meet the requirements

Delineates responsibilities and expected behavior Outlines what needs to be done

Not how to do it

Automated system policies should mirror written policies

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Establishing a Security Policy (continued)

Trade-off between
Ease of use Increased security

Areas of concern
E-mail attachments Wireless devices

VPN uses the Internet to relay communications but maintains privacy through security features Additional security includes encrypting originating and receiving network addresses
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Educating Employees, Contractors, and Part-Time Workers

Educate users about the importance of security
Motivate them to understand and follow security policy

Discuss recent security incidents that affected the organization Help protect information systems by:
Guarding passwords Not allowing others to use passwords Applying strict access controls to protect data Reporting all unusual activity
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Prevention
Implement a layered security solution
Make computer break-ins harder

Firewall
Limits network access

Antivirus software
Scans for a specific sequence of bytes Known as the virus signature Norton Antivirus Dr. Solomons Antivirus from McAfee

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Firewall Protection

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Popular Firewall Software for Personal Computers

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Prevention (continued)
Antivirus software
Continually updated with the latest virus detection information Called definitions

Departing employees
Promptly delete computer accounts, login IDs, and passwords

Carefully define employee roles Create roles and user accounts

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Prevention (continued)
Keep track of well-known vulnerabilities
SANS (System Administration, Networking, and Security) Institute CERT/CC

Back up critical applications and data regularly Perform a security audit

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Detection
Detection systems
Catch intruders in the act

Intrusion detection system

Monitors system and network resources and activities Notifies the proper authority when it identifies Possible intrusions from outside the organization Misuse from within the organization Knowledge-based approach Behavior-based approach
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Detection (continued)
Intrusion prevention systems (IPSs)
Prevent attacks by blocking Viruses Malformed packets Other threats Sits directly behind the firewall

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Detection (continued)
Honeypot
Provides would-be hackers with fake information about the network Decoy server Well-isolated from the rest of the network Can extensively log activities of intruders

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Response
Response plan
Develop well in advance of any incident Approved by Legal department Senior management

Primary goals
Regain control Limit damage

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Response (continued)
Incident notification defines
Who to notify Who not to notify

Security experts recommend against releasing specific information about a security compromise in public forums Document all details of a security incident
All system events Specific actions taken All external conversations
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Response (continued)
Act quickly to contain an attack Eradication effort
Collect and log all possible criminal evidence from the system Verify necessary backups are current and complete Create new backups

Follow-up
Determine how security was compromised Prevent it from happening again

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Response (continued)
Review
Determine exactly what happened Evaluate how the organization responded

Capture the perpetrator Consider the potential for negative publicity Legal precedent
Hold organizations accountable for their own IT security weaknesses

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Summary
Ethical decisions regarding IT security include determining which information systems and data most need protection 65-fold increase in the number of reported IT security incidents from 1997 to 2003 Most incidents involve a:
Virus Worm Trojan horse Denial-of-service
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Summary (continued)
Perpetrators include:
Hackers Crackers Industrial spies Cybercriminals Cyberterrorists

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Summary (continued)
Key elements of a multilayer process for managing security vulnerabilities include: Assessment User education Response plan

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