The Virtual Spy Next Door

August 7, 2014 at 8:52 am 1 comment

Keeping in mind that you have an obligation to monitor potential red flags of identity theft and mitigate evolving risks, here is some news worth reaching out to your IT vendor about. The NY Times reported earlier this week that “A Russian crime ring has amassed the largest known collection of stolen Internet credentials, including 1.2 billion user name and password combinations and more than 500 million email addresses. . .” What’s more, according to the security firm that uncovered the scheme, since the goal of the hackers was to steal password credentials as opposed to stealing from the compromised companies the hackers were targeting businesses of all shapes and sizes. Given the scope of the operation, you can bet a credit union or two or three is among the institutions that are being informed their websites have been compromised. As usual, an excellent source of additional information is this post from Krebs on Security.

First, on a purely practical note, this news showed me why it’s so dumb to use the same password for everything. The only reason this treasure trove of lifted passwords is valuable is because they can be used to access multiple online accounts and services.

The more I think about this news the angrier I am at our government. It may be ideologically edifying for some of our elected representatives to stand in the way of any government action, but there are some things that only the government can do. Cybersecurity should be a top national priority right now. In fact, Preet Bharara has correctly argued that cyber-attacks are this century’s Pearl Harbor. But our government is unable and or unwilling to pass meaningful legislation and make the investment necessary to have a truly robust defense against cyber-attacks.

What we are left with is a bunch of well-meaning but ultimately impotent attempts by regulators to do their part to help protect consumers.  For example, earlier this year the FFEIC highlighted the need for smaller institutions to guard against cyber-attacks. As part of this effort, it’s conducting pilot cyber assessments and has held a Webinar geared towards community banks and credit unions. I just reviewed the slides and it has some good advice such as suggesting depository institutions ask themselves:

How is my organization identifying and monitoring cyber-threats and attacks both to my institution and to the sector as a whole? How is this information used to inform my risk assessment process?

Such well-meaning advice is tantamount to reminding kids not to play with guns in the middle of a war zone. Without a concerted national commitment, all but the largest businesses in America will find it increasingly impossible to offer cost effective cyber services. You are all being subject to a virtual shakedown and the only institution with the resources to effectively do anything about it is the federal government. Unfortunately, this is the same government that can’t pass meaningful cyber reforms such as imposing risk assessment obligations on merchants.

In the meantime, the nation is furious that the Government isn’t doing more to stop kids who are rushing to the nation’s borders for a better life. Why isn’t it furious that foreign criminals are making billions by ripping off businesses and consumers?

On that note, have a nice day.

 

 

 

 

 

Entry filed under: Advocacy, Compliance, General. Tags: , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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