Feeds

Phishing attack evades bank's two-factor authentication

Man in the middle

The Essential Guide to IT Transformation

A two-factor authentication system operated by Dutch bank ABN Amro has been compromised and money stolen from the online accounts of customers who fell for a phishing scam.

Two-factor authentication for online banking usually involves passwords and tokens which provide synchronised, constantly changing numbers to use as additional evidence of identity.

The security industry has promoted the tokens as a preventative measure against hacking for users of remote corporate or banking systems. However, experts have warned that they are still vulnerable to phishing attacks, where fraudulent emails lure recipients to bogus websites that are set up to gather security details.

Four customers who used two-factor authentication have been compensated by ABN Amro for undisclosed amounts taken from their bank accounts.

"We are taking this incident very seriously and, in addition to informing our clients, are also implementing all of the technical measures that are at our disposal to stop criminals in their tracks," said Johan van Hall of ABN Amro Netherlands. "Safe usage of home and office computers is an essential requirement for secure online banking, and we plan to remind our clients even more frequently and urgently than before of that fact."

Hackers sent the customers emails falsely claiming to be from ABN Amro. If recipients opened an attachment, software was installed on their machines without their knowledge. When customers visited their banking site, the software redirected them to a hacker-controlled mock site that requested their security details.

As soon as the hackers received these details they were able to log into a customer's account at the real ABN Amro site, before the expiry of the fob-generated number. They could then transfer the customer's money.

Security experts have warned that such "man in the middle" attacks cannot be prevented by security tokens.

At the E-Crime Congress in London last month, several experts spoke out about the limitations of the systems. "Even when all the banks have it [hackers] will still attack them," said Mikko Hypponen, chief research officer of security firm F-Secure, at the Congress. "We see them using 'man in the middle' already."

"There are a whole bunch of things that can go wrong with two-factor authentication," Ross Anderson, a professor of security engineering at Cambridge University, told the same conference. "Banks are resisting because their technical staff know that it will be expensive to introduce and will not be effective. Some banks will introduce it, it will be quickly broken and then quickly forgotten."

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Build a business case: developing custom apps

More from The Register

next story
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
'Things' on the Internet-of-things have 25 vulnerabilities apiece
Leaking sprinklers, overheated thermostats and picked locks all online
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
Multipath TCP speeds up the internet so much that security breaks
Black Hat research says proposed protocol will bork network probes, flummox firewalls
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Fiendishly complex password app extension ships for iOS 8
Just slip it in, won't hurt a bit, 1Password makers urge devs
Tor attack nodes RIPPED MASKS off users for 6 MONTHS
Traffic confirmation attack bared users' privates - but to whom?
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.